boAt sails away from IPO; raises $60 mn from Warburg, Malabar

 boAt sails away from IPO; raises $60 mn from Warburg, Malabar

Private equity giant Warburg Pincus and public market-focused investment firm Malabar have backed Imagine Marketing India Ltd, the company behind audio and wearables brand boAt, with a Rs 500 crore ($60 million) infusion as the company withdrew its proposed initial public offering (IPO).

boAt raised the money via convertible notes, the company said Friday.

Imagine Marketing, founded in November 2013 by Sameer Mehta and Aman Gupta, had filed a draft prospectus with the Securities and Exchange Board of India in January this year to mobilise Rs 2,000 crore ($266 million) via an IPO.

The planned IPO comprised Rs 900 crore in fresh shares and Rs 1,100 crore in secondary share sales by Mehta, Gupta and Warburg. While the two founders planned to sell shares worth Rs 150 crore each, the PE firm intended to garner Rs 800 crore.

The direct-to-consumer (D2C) brand, which also counts Fireside Ventures and Qualcomm Ventures as investors, had received a green signal to go ahead with the IPO in April. However, the slide in tech sector valuations and broader market volatility prompted the company to stay away from floating the issue.

The company joins auto-tech startup Droom to pull out of the public market track.

Axis Capital, BofA Securities India, Credit Suisse Securities (India), and ICICI Securities were the merchant bankers in charge of arranging and managing the IPO.

The company said the fresh money it has raised now will fuel the expansion of its presence in the smartwatch category. It will also scale its business across channels and geographies both within and outside India, strengthen its category leadership within audio, enhance its R&D and design capabilities, and support building a local manufacturing ecosystem.

Gupta, Co-founder and Chief Marketing Officer, of boAt, said “We now want to make smartwatches our second core and will replicate the boAt digital playbook to become global leaders in this category as well. The new funding will allow us to invest significantly to disrupt the smart watches spaces with more innovative products.”

The company said it closed FY22 with net revenue of around Rs 3,000 crore.

In 2018-19, it clocked a net profit of Rs 8.03 crore on revenue of Rs 225.84 crore. Profit rose to Rs 86.53 crore on revenue of Rs 1,313.7 crore for 2020-21. For the six months ended September 2021, the company reported a consolidated net profit of Rs 118 core on revenue from operations of Rs 1,548 crore.

The company gets 83-85% of its revenue through third-party online channels and e-commerce platforms such as Amazon, followed by 13-14% through offline channels, and 1-3% through its own website.

Vivek Sinha

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