The New Delhi-based company is expected to seek a valuation of $1.5-2 billion in the IPO to be floated this year, people aware of the matter told ET.
Private equity major Warburg Pincus, the single largest shareholder in Boat with around 36% stake, will divest shares worth Rs 700-800 crore in the IPO, which will be an equal mix of fresh stock and an offer for sale. Cofounders Aman Gupta and Sameer Mehta, who own around 56% of the firm, are expected to dilute a minor part of their holding.
When contacted, a Boat spokesperson declined to comment on the company’s IPO plan and its offer details. An email sent to Warburg Pincus remained unanswered.
Boat was last valued at around Rs 2,200 crore when it
raised Rs 50 crore from Qualcomm Ventures in April last year. It is now eyeing a valuation of around 5-6 times its revenue for this fiscal, people cited earlier said. “They (Boat) are getting indications to price the IPO at revenue multiples of five to six times,” one of them said. “They are expected to nearly double the revenue by the end of March.”
Sources, however, said the final IPO pricing may still change depending on broader external market conditions. Recently listed new-age Indian companies have seen their stocks getting hammered in recent days as part of a broader market fall.
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Boat’s parent Imagine Marketing Pvt. Ltd has converted into a public company to facilitate the IPO and its board has approved the plan to launch the IPO. “The DRHP should be filed by Thursday,” said the person quoted earlier.
Founded in 2016, Boat has emerged as one of the prominent homegrown D2C brands that has challenged market leaders in the earphones and wearables space. It clocked a net profit of Rs 78 crore in the fiscal ended March 31, 2021, on the back of Rs 1,500 crore in revenue.
Boat and Mamaearth are among the first set of D2C brands that started online-only and are now expanding their presence through offline channels as well. In fact, Boat was virtually born on Amazon India, said people who have tracked it since inception.
The company is also setting up a fund to invest in early stage D2C brands as the sector comes into prominence amid growing use of ecommerce among consumers. “The fund size is getting finalised, and it will essentially invest in promising brands early on,” one of the people mentioned above said.
The plan comes at a time when Thrasio-style ventures, which typically acquire brands and scale them, are gaining prominence.
Thrasio itself has entered India with plans to invest $500 million, as reported by ET.
Omnichannel retailer Lenskart
has set up a $20-million Vision Fund through which it has started investing in early-stage startups in the eyewear business and its vicinity, ET had reported last year.
Boat recently signed a 50-50 joint venture with electronics manufacturer Dixon Technologies Ltd. to make its wireless audio products locally, moving away from China. “Combining the capabilities of Boat and Dixon in the electronic manufacturing services (EMS) space, we aim to build a strong manufacturing base and ecosystem in India,” cofounder Mehta had said earlier this month. “Ramping up local production will significantly help in enhancing India’s share in the global markets contributing to the vision of an Aatmanirbhar Bharat.”
Boat has also acquired Singapore’s KaHa Pte Ltd, an end-to-end smart IoT product development company. The deal is worth around Rs 300-400 crore, according to sources. The company had not announced the deal size at the time of the announcement of the acquisition this month.
Wearables is a big part of focus for the company as it looks to widen its offerings under the brand. Within a year of launching the business, Boat said it is among the top two players in the sector with a 20% market share. According to the company, the wearables market in India is expected to grow more than 10 times $2-4 billion by 2025 compared to $200 million in 2018.
