Wakefit shares slide after stock market debut, paring paper gains of founders and early investors

With mattress and furniture maker Wakefit’s shares sliding after its tepid stock market debut on Monday, the company’s founders and early investors suffered a drop in their notional paper gains compared with levels implied when the IPO price band was announced.

Wakefit’s IPO price band was fixed between Rs 185-195. The stock opened at Rs 195 on the National Stock Exchange and slipped to Rs 177 within the first few hours of trading.

Cofounders Ankit Garg and Chaitanya Ramalingegowda hold 28.7% and 8.06% stakes in the company following the listing, valued at about Rs 1,689 crore and Rs 473 crore, respectively, at the current market price.

Garg and Ramalingegowda made around Rs 151 crore and Rs 87 crore, respectively, from the offer-for-sale (OFS) portion of the IPO. Garg, who owns about 103 million shares, sold around eight million shares, while Ramalingegowda offloaded four million of his 31 million shares.

Peak XV Partners, the Bengaluru-based company’s largest shareholder after Garg, holds a 13.71% stake and is sitting on an 8.6x paper gain on its investment at the current stock price of Rs 177, compared with an estimated 11x gain at the time the price band was announced. The venture capital firm trimmed its OFS portion to 2 crore shares from 2.5 crore shares and received around Rs 400 crore. Its remaining stake is currently valued at about Rs 805 crore.

Among other selling shareholders, Verlinvest’s stake is valued at around Rs 268 crore, while SIG Asia VC and Korean investor Paramark hold stakes worth about Rs 285 crore and Rs 45 crore, respectively.