BoAt is an India-based electronics brand founded in November 2013. This company is known for marketing audio-focused smart wearables and accessories. The business is carried out under a legal name, Imagine Marketing Services Private Limited, incorporated in 2013, while BoAt is the household name.
BoAt creates and sells smartwatches as well as a variety of audio-related accessories, including earbuds, travel chargers, stereo headphones, home audio gear, wireless speakers, premium tough cables, and a wide range of cell phone accessories. Additionally, BoAt promotes its goods by working with celebrities, sports teams, and public events. The business is now prepared to grow its market by achieving an initial public offering (IPO) valuation of $1.5 to $2 billion.
boAt IPO Objectives
Some of the objectives that BoAt wishes to fulfill with the proceeds from this IPO are listed below:
- Expand 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 the BoAt IPO?
Here are the reasons why an individual should subscribe to the BoAt IPO:
- The business intends to use its current distributors and their connections with regional shops to grow into offline markets and Tier 2+ cities and towns in India. By growing sales volume on other marketplaces and platforms like Myntra, Tata CLiQ, and the online retailer Nykaa, BoAt will also broaden the reach of its online sales.
- BoAt is a direct-to-consumer (D2C) firm that ranks highly in the hearables area and second in the wearables category. Over 85% of the company’s total sales are made through digital channels and marketplaces, where it also retains its position as the top brand.
- The company has sought out partnerships with component suppliers like Qualcomm (a shareholder in the parent company), Google, Dolby, and Bharat FIH in an effort to improve its products.
- In each of the last three fiscal years, the company has maintained a profit. The company’s costs are still primarily made up of the electrical products it resells.
- While just investing Rs. 1.7 million in plant, property, and equipment in FY21, the company made 1.3 billion in sales. Instead of buying offices and warehouses, the company rents them out to keep capital expenditures to a minimum.
- Over the years, the company has grown steadily, with a return on capital employed of over 15% during the last three fiscal years and 66.8% over the most recent fiscal year.
BoAt IPO Financials
| 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 |
Know before investing
Strengths
- BoAt is one of the largest digital-first brands in India and holds leading market positions.
- It is a consumer brand with a clear value proposition and a strong market position.
- Distinctive marketing capabilities can effectively generate greater consumer engagement and high sales levels.
- Backed by real-time feedback from sales channels and customers, the company can develop products on a timely basis and stock those that are most in demand.
- The in-house design team of BoAt Labs has worked on several projects aimed at improving the products of the company. BoAt says that this has helped it create a product line tailored to the Indian market.
Risks
- BoAt suffers from a lack of brand loyalty among its customers. New brands offering quality products at similar or lower prices might take market share from this company.
- The visibility of the brand is heavily impacted by algorithms on online marketplaces and by the ability of the company to secure promotions with these venues. Revenue for the company will be hurt if it loses its presence in these venues or experiences major issues with them.
- The majority of the products of this company are manufactured overseas, with recent shifts to India and Vietnam. Supply-chain issues, foreign currency swings and changes in import duties remain risks to the company.
- The company has to rely on several third-party suppliers to produce its products.
- Similarly, the company has to rely on its relationship with digital marketplaces and offline retailers.
- The gross margins can be affected by the occurrence of pricing pressures from marketplaces and consumers.
BoAt IPO FAQs:
Q1. Is BoAt an Indian company?
Ans. Yes, BoAt is an Indian electronics brand that markets smart gear and audio-focused wearables. The business is conducted by Imagine Marketing Services Private Limited, which was incorporated by co-founders Aman Gupta and Sameer Ashok Mehta. Though the products are manufactured in China, the designs are crafted in India.
Q2. Is BoAt made in China?
Ans. So far, 10% of products from boAt are churned out in India, and the remaining 90% is manufactured in China and Vietnam. Further, after a tie-up with Qualcomm Ventures, the company is set to invest in the ‘Make in India’ initiative, shifting its manufacturing base from China by 2024
Q3. Is boAt a listed company?
Ans. boAt has become the first D2C Indian brand that has headed for a public listing. As per the reports, Imagine Marketing Limited, the parent company of boAt, has submitted a Draft Red Herring Prospectus with the Securities and Exchange Board of India. The company now awaits approval from SEBI to float the IPO.
Q4. What is the valuation of BoAt?
Ans. After raising Rs. 50 crores from a tie-up with Qualcomm ventures in April 2021, the valuation stood at Rs. 2,200 crores. Further, the company has made a move to float an IPO, eyeing a 5 to 6 times higher valuation over its revenue in this fiscal year.
Q5. Is boAt profitable company?
Ans. Since its incorporation in the year 2015, the brand’s annual profits have only surged. In the financial year 2021, the company recorded a profit surge of 61%, from Rs. 48.8 crores in FY 20 to Rs. 78.6 crores in FY 21. Regardless of dropped EBITDA margins by 237 BPS, calculated to 8.34% during FY 21 from 10.71% reflected in FY 20, the profits have seen a massive hike.
Q6. Who are the investors in boAt?
Ans. Qualcomm Ventures, Warburg Pincus, and InnoVen Capital are some of the lead investors in boAt.
