Imagine Marketing Limited’s flagship brand – “boAt”, is all set to sail with its initial public offering (IPO). The company submitted its draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) at the end of January 2022. The company has filed for INR 2,000 cr IPO. Here’s a look at the company and the exploration of the map of its DRHP.
A brief on how the “boAt” keeps afloat
The boAt brand is much more than labelled headphones and smartwatches you see online and on the street. Headquartered in Delhi, this D2C startup was founded by Aman Gupta and Sameer Mehta in 2016, and within 6 years of its launch, the startup has commanded a very strong position in the electronics market such that, for the FY 2020-21, it was the largest digital-first company in India in terms of operational revenue.
The company offers a wide range of lifestyle-centric consumer products such as wired and wireless headphones and earphones, portable speakers, smartwatches, gaming and mobile accessories, and personal care appliances, under its brand name. It also envisages offering distinct and aspirational products to young online audiences of India at affordable prices to let them slide with the trend.
Key extracts from the DRHP
As per the draft prospectus filed on January 28, 2022, the INR 2,000 cr IPO comprises a fresh issue of INR 900 cr worth of shares and the existing stakeholders are offering shares worth INR 1,100 cr in an offer for sale (OFS). Out of the funds of INR 900 cr that will go into the company’s hands, Imagine Marketing Limited is planning to use it for repayment of debt.
As far as INR 1,100 cr is concerned, the largest investor, South Lake Investment is planning to divest INR 800 cr and the balance of INR 300 cr will be offloaded by the duo-founders, Aman Gupta and Sameer Mehta. In addition to that, the DRHP also disclosed that the lead managers for this IPO are going to be ICICI Securities, Credit Suisse Securities, Axis Capital, and Bank of America Securities.
What the shareholding and numbers have to say
As of January 2022, Aman Gupta and Sameer Mehta hold approximately 56 per cent stake in the company. South Lake is the biggest investor, holding 36.48 per cent of the shareholdings of boAt. The smaller investors include Qualcomm Ventures and Fireside Ventures with a shareholding of 2.6 percent and 3.7 percent respectively.
For FY 2020-21 ending September 30, 2021, Imagine Marketing Limited made a profit of INR 118.3 cr on a total turnover of INR 1,547 cr. The company earns the highest revenue from the sale of the audio segment which includes wired earphone, wireless earphone, wired headphone, wireless headphone, wireless speakers and soundbar. In FY 2020, the sales figure stood at INR 594 cr whereas in 2021, this number surged to INR 1,228 cr which is a mammoth growth of more than 2x within one year.
The boAt IPO is likely to sail the sea of Indian financial markets very soon. One of India’s largest D2C audio-focused electronics names, boAt plans on building a market leadership position in its existing domain to accelerate further growth. It is also considering expansion across other adjacent categories of products via existing brands or by creating new brands by acquisition. Initiatives like Make-in-India and Vocal-for-Local are likely to fillip its position in the domestic markets. With its IPO all set, will the tides flow in favour of boAt? Time will tell.