boAt, a Delhi-based consumer electronics brand, is likely to become the first Indian D2C brand to file an initial public offering (IPO). D2C plans to file the DRHP with market regulator SEBI this week to raise around Rs 2,000 crore through its IPO.
The IPO offering would consist of a primary issue of shares worth Rs 1,000 crore and an offer to sell (OFS) worth Rs 1,000 crore. The audio-focused brand is likely to seek a valuation of between $1.5 billion and $2 billion in the IPO expected to launch this year, ET reported citing sources. The startup has appointed Axis Bank, Bank of America, Credit Suisse and ICICI Securities to handle its upcoming IPO.
Warburg Pincus is expected to be among the top investors liquidating shares for Rs 700-800 crore to cut its stake below 25% as boAt prepares to go public as a professionally managed company. Warburg Pincus currently owns approximately 36% of boAt. Co-founders Aman Gupta and Sameer Mehta, who control about 56% of the company, are expected to offload a small portion of their stake.
boAt was last valued at over Rs 2,200 crore when it secured Rs 50 crore funding from Qualcomm Ventures in April last year. The consumer electronics brand is now pushing for a valuation of around 5 to 6 times its revenue for this financial year, according to the sources cited above. “They (boAt) are receiving guidance to price the IPO at five to six times revenue multiples, and are expected to nearly double revenue by the end of March,” said a source. However, according to the sources, the final price of the IPO may fluctuate depending on general external market conditions. Shares of newly listed new-age Indian companies have been crushed in recent days as part of a broader market downturn.
boAt’s parent company, Imagine Marketing Pvt. ltd. turned to a public company to facilitate the IPO process, and its board of directors agreed to the plan to file for an IPO. “The DRHP should be filed by Thursday”, said the aforementioned source.
boAt, which was founded in 2016, has grown into a well-known domestic D2C brand that has undermined market leaders in audio and portable devices. The audio-tech brand manufactures headphones, 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 generated Rs 1,511 crore in operating revenue and Rs 19.57 crore in other revenue, bringing the total revenue to Rs 1,531 crore, a double increase from Rs 704 crore during the FY20. In FY21, the company posted an EBITDA of Rs 127.1 crore. boAt’s spending increased by 122% from Rs 637.5 crore in FY20 to Rs 1,420 crore in FY21. The earnings of the consumer electronics brand based in Delhi jumped 61% in FY21 to Rs 78.6 crore from Rs 48.85 crore in FY20.