A lot of companies do have a work from home policy. My office was in Whitefield EPIP area and we had an unlimited WFH policy where employees are free to work from home as and when they want (except when there are important meetings). But people always preferred to come to work.
Like Anvit Sir said, the work quality is usually different when working from home. Our work required regular collaboration between teams, discussing with our colleagues, helping people debug issues etc. All of these are far more efficient and easier when everyone is sitting together in one building. Working from home solves the travel problem, but has many drawbacks too.