BoAt GMP IPO Details
BoAt (legal name “Imagine Marketing Services Pvt. Ltd.”) is an Indian electronics brand that was founded in November 2013. The company is widely recognized for its audio-focused smart wearables and accessories. It operates under the legal entity Imagine Marketing Services Private Limited, which was incorporated in 2013. However, boAt has become a well-known household name.
boAt specializes in the design and marketing of smartwatches and audio accessories. Their product range includes earphones, travel chargers, stereo headphones, home audio equipment, wireless speakers, premium rugged cables, and a comprehensive collection of mobile phone accessories. To promote their products, boAt actively engages in public events and collaborates with influencers and sports teams.
With its upcoming Initial Public Offering (IPO), boAt aims to expand its market and achieve a valuation of $1.5 to $2 billion. The IPO will provide an opportunity for investors to be part of boAt’s growth and success in the electronics industry.
BoAt IPO Objectives
boAt has outlined several objectives it aims to achieve with the proceeds from its Initial Public Offering (IPO):
- Expand presence by indulging in a wide range of lifestyle categories.
- To continue investing and take the brand to greater heights.
- Increase marketing capabilities to generate a greater consumer base.
- Build robust design, research, development and technical capabilities.
Why should you invest in boAt IPO?
Here are the reasons why individuals should consider subscribing to the boAt IPO:
- One reason to consider investing in the boAt IPO is its strategic expansion plan into offline markets and Tier 2+ cities in India. By leveraging existing distributors and their relationships with local retailers, boAt aims to broaden its presence and tap into new customer segments. Additionally, boAt plans to enhance its online sales by increasing sales volume on popular marketplaces and channels like Nykaa, Tata CLiQ, and Myntra. This multi-channel approach allows boAt to reach a larger customer base and maximize its sales potential.
- boAt is a leading direct-to-customer (D2C) company, ranking high in the hearables category and second in the wearables category. The company’s strong presence in digital channels and marketplaces contributes to over 85% of its total sales, solidifying its position as the top brand in these online platforms.
- To enhance its product offerings, boAt has established strategic partnerships with renowned component suppliers such as Qualcomm (a shareholder in the parent company), Google, Dolby, and Bharat FIH. These collaborations enable boAt to integrate cutting-edge technologies and deliver innovative and high-quality products to its customers.
- BoAt has sustained profitability over the past three fiscal years, with the highest portion of costs attributed to the resale of electronic goods. This highlights the company’s consistent financial success and emphasizes its focus on effectively managing expenses while maintaining a profitable business model.
- During FY 21, boAt achieved revenues of Rs. 1.3 billion, while keeping its investment in plant, property, and equipment to just Rs. 1.7 million. The company adopts a strategy of leasing offices and warehouses instead of purchasing them, enabling it to minimize capital expenditure and allocate resources more efficiently.
- The company has experienced consistent growth over the years, achieving a return on capital employed of over 15 percent in the past three fiscal years and an impressive 66.8 percent in the latest fiscal year.
BoAt IPO Details
On January 26, 2022, Imagine Marketing Limited, the parent company of boAt, filed a Draft Red Herring Prospectus (DRHP) with SEBI for an Initial Public Offering (IPO) of Rs. 2,000 crores. This IPO comprises a fresh issue of equity shares worth Rs. 900 crores and an offer for sale of equity shares amounting to Rs. 1,100 crores, as stated in the DRHP. Additionally, the company aims to raise Rs. 180 crores through a pre-IPO placement. Currently, the company is awaiting SEBI’s approval before it can launch the IPO in the market.
Boat Company Financial Report
| Financial Year | Total Revenue in Crores | Profit After Tax in Crores |
|---|---|---|
| FY 2021 (as of 30 September 2021) | Rs. 1,313 | Rs. 86 |
| FY 2020 (as of 31 March 2020) | Rs. 609 | Rs. 47 |
| FY 2019 (as of 31 March 2019) | Rs. 225 | Rs. 8 |
IPO Key Points
Strengths:
- boAt is one of the largest digital-first brands in India, holding leading market positions.
- It is a consumer brand with a clear value proposition and a strong market position.
- Distinctive marketing capabilities enable the company to generate greater consumer engagement and achieve high sales levels effectively.
- The company receives real-time feedback from sales channels and customers, allowing it to develop products on a timely basis and stock those that are in high demand.
- The in-house design team at boAt Labs has undertaken various projects to enhance the company’s product offerings, resulting in a product line tailored to the Indian market.
Risks:
- boAt faces a lack of brand loyalty among its customers, which makes it susceptible to competition from new brands offering similar or lower-priced quality products.
- The visibility of the brand heavily depends on algorithms on online marketplaces and the company’s ability to secure promotions. Revenue may be impacted if it loses its presence on these platforms or encounters significant issues with them.
- Most of the company’s products are manufactured overseas, with recent shifts to India and Vietnam. Supply chain issues, foreign currency fluctuations, and changes in import duties pose risks to the company.
- boAt relies on several third-party suppliers for product manufacturing.
- The company’s relationship with digital marketplaces and offline retailers is crucial for its success.
- Pricing pressures from marketplaces and consumers can affect the company’s gross margins.
BoAt IPO FAQ’s
Is boAt an Indian company?
Yes, boAt is an Indian company that designs and markets smart gears and audio-focused wearables. The business is operated by Imagine Marketing Services Private Limited, founded by Aman Gupta and Sameer Ashok Mehta. While the products are manufactured in China, the designs are developed in India.
Is boAt made in China?
Currently, 10% of boAt products are manufactured in India, while the remaining 90% is produced in China and Vietnam. However, the company has announced plans to shift its manufacturing base from China to India by 2024, as part of the ‘Make in India’ initiative, following a partnership with Qualcomm Ventures.
Is boAt a listed company?
boAt has filed a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO). The company is awaiting approval from SEBI to proceed with the IPO, which would make it a publicly listed company.
What is the valuation of boAt?
After raising Rs. 50 crores through a partnership with Qualcomm Ventures in April 2021, boAt was valued at Rs. 2,200 crores. With the upcoming IPO, the company aims to achieve a valuation that is 5 to 6 times higher than its current revenue in the fiscal year.
Is boAt a profitable company?
Yes, boAt has been a profitable company since its inception in 2015. In the financial year 2021, the company recorded a profit growth of 61%, with profits increasing from Rs. 48.8 crores in FY 20 to Rs. 78.6 crores in FY 21. Despite a decrease in EBITDA margins, the company has experienced significant profit growth.
Who are the investors in boAt?
Some of the prominent investors in boAt include Qualcomm Ventures, Warburg Pincus, and InnoVen Capital. These investors have shown confidence in the company’s potential and have supported its growth.
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