boAt, a Delhi-based consumer electronics brand, is likely to become the first Indian D2C brand to file for an initial public offering (IPO). The D2C firm plans to file the DRHP with market regulator SEBI this week in order to raise around Rs 2,000 crore through its IPO.
The IPO offer would include a primary issue of shares worth Rs 1,000 crore and an offer for sale (OFS) worth Rs 1,000 crore. The audio-focused brand is likely to seek a valuation between $1.5-2 billion in the IPO which is slated to float this year, ET reported citing sources. The startup has appointed Axis Bank, Bank of America, Credit Suisse, and ICICI Securities to manage its upcoming IPO.
Warburg Pincus is expected to be among the key investors who would liquidate shares for Rs 700-800 crore to shrink its stake below 25 percent as boAt prepares to go public as a professionally managed firm. Warburg Pincus currently owns about 36 percent of boAt. Co-founders Aman Gupta and Sameer Mehta, who control around 56 percent of the company, are expected to offload a minor portion of their stake.
boAt was last valued at over Rs 2,200 crore when it secured Rs 50 crore in funding from Qualcomm Ventures in April of last year. The consumer electronics brand is now pushing for a valuation of about 5-6 times its revenue for this fiscal year, according to the sources cited above. “They (boAt) are getting indications to price the IPO at revenue multiples of five to six times, and are expected to nearly double the revenue by the end of March,” a source said. However, as per sources, the final IPO pricing could fluctuate based on broader external market conditions. Stocks of newly listed new-age Indian firms have been crushed in recent days as part of a broader market downturn.
boAt’s parent company, Imagine Marketing Pvt. Ltd. has turned to a public company in order to smooth the IPO procedure, and its board of directors has accepted the plan to file for the IPO. “The DRHP should be filed by Thursday,” claimed the earlier-mentioned source.
boAt, which was founded in 2016, has emerged as a renowned domestic D2C brand that has undermined market leaders in the audio and wearables space. The audio-tech brand manufactures earphones, speakers, headphones, True Wireless Stereo (TWS), soundbars, premium rugged cables, travel chargers, among other products.
boAt had a spectacular year in FY21, with revenue exceeding Rs 1,500 crore. The D2C brand garnered Rs 1,511 crore in revenue from operations and Rs 19.57 crore in other income, bringing the total income to Rs 1,531 crore, a twofold increase from Rs 704 crore in FY20. In FY21, the company posted an EBITDA of Rs 127.1 crore. boAt’s expenses increased by 122 percent from Rs 637.5 crore in FY20 to Rs 1,420 crore in FY21. The profit of the Delhi-based consumer electronics brand jumped by 61 percent in FY21 to Rs 78.6 crore from Rs 48.85 crore in FY20.