BoAt To Float Rs 2,000 Cr IPO: Key Takeaways & What Lies Ahead
Delhi-based BoAt is now the biggest wearable-electronics brand in India, and the fifth largest in the world.
The Quint DAILY
For impactful stories you just can’t miss
Imagine Marketing, the parent of electronics brand BoAt, has reportedly filed draft papers with market regulator Securities and Exchange Board of India (SEBI) to raise up to Rs 2,000 crore through an initial public offering (IPO), seeking a valuation of $1.5-2 billion.
The Indian brand, which makes consumer electronics like headphones, watches, gaming controllers, and charging cables, is one of the biggest players in the wearables segment.
The IPO will include fresh shares worth up to Rs 900 crore and an offer for sale (OFS) of up to Rs 1,100 crore, reports indicate. The OFS is a mechanism through which a company's promoters can sell their shares.
Notably, Aman Gupta, co-founder and Chief Managing Officer of BoAt recently appeared as an investor on Shark Tank India. Among the seven 'sharks,' he has invested the most in the contestants' start-ups at Rs 7.5 crore..
Here's a look at the Delhi-based company that rose to dominate a market segment replete with competitors.
Getting BoAt Out of the Harbour
Aman Gupta and Sameer Mehta co-founded BoAt in November 2016. The timing was inauspicious, since Chinese smartphone and electronics brands had just started flooding the Indian market, drowning out local players.
Korean, Japanese, German, and American brands also had a strong foothold in consumer electronics.
Because of this, the company initially faced issues borrowing from banks and securing funds from investors.
“People started writing our obituary even before we were born.”Aman Gupta to Forbes
To keep BoAt afloat, the founders poured in Rs 30 lakh of their own and started off by selling mobile cables and chargers, according to Forbes.
5th Biggest Wearable Brand in the World
The pay-off was immense; BoAt is now the biggest wearable-electronics brand in India, and the fifth largest in the world, data suggests. It reported a net profit of Rs 78 crore in FY21, and a revenue of Rs 1,500 crore.
BoAt followed Apple, Samsung, Xiaomi, and Huawei, with a 7.2 percent market share in the third quarter of 2021, according to International Data Corporation (IDC). Of the five, it is the fastest growing by far, with a year-on-year growth of over 200 percent.
In India, BoAt led the market with a 48 percent share in 'hearables' (ear wear) and a 23 percent share in watches in Q3 2021.
"Relentless marketing and low-cost products have helped drive volume. In recent quarters, the company has also launched watches, which now account for 10% of its shipments," the IDC report said.
BoAt is now backed by investors like Qualcomm, Fireside Ventures, and South Lake Investment (Warburg Pincus).
BoAt’s Marketing Blitz
BoAt markets itself as a lifestyle brand and its products as fashion accessories, not mere electronics. Tellingly, it refers to its customers as 'boAtheads' and gives its earphones names like 'Airdopes' and 'Rockerz'.
Unlike many of its competitors, which prefer an increasingly muted design language, its products are highly stylised and often plastered with graphics from its many collaborations – with Marvel, Bira, and Designer Masaba Gupta, among others.
It also positions itself as a brand that offers durable audio products at an affordable price, often undercutting competitors like JBL and Sony in the same product category.
In keeping with its image, BoAt regularly ropes in young celebrities to appeal to its key demographics. The list includes cricketers like Shikhar Dhawan and Hardik Pandya, actors Jacqueline Fernandez and Kartik Aryan, and musicians like Neha Kakkar and Diljit Dosanjh.
The brand also loves event marketing. On different occasions, it has partnered with six Indian Premier League (IPL) teams, Asia's largest music festival Sunburn, and Lakmé Fashion Week.
BoAt's products, which are made by contract manufacturers in India and China, have generally favourable reviews on online platforms. Their sound signature has a reputation of being bass-heavy.
What’s Next for BoAt?
The wearables market in India (smartwatches, earbuds, and wristbands) grew by 93.8 percent year-on-year in the third quarter of 2021, according to IDC data. Watches were the fastest-growing category, while truly wireless (TWS) devices pushed ear wear sales.
The pandemic continues to increase demand for consumer electronics, including devices that track health and fitness such as smartwatches and wristbands. BoAt isn't the only Indian brand riding this wave; Noise, Fire-Boltt, Ptron, and Titan are also growing at a rapid pace.
The company is also setting up a fund to invest in novice direct to customer (D2C) brands as the sector comes into prominence due to increased adoption of e-commerce, sources told Economic Times.
The company is also trying to reduce its dependence on Chinese manufacturers. It recently signed a 50-50 joint venture with electronics manufacturer Dixon Technologies to make its wireless audio products locally.
“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,” said Sameer Mehta, co-founder and chief product officer at BoAt.
Boat has also acquired Singapore's KaHa Pte, an end-to-end internet of things (IoT) product development company, presumably in an effort to broaden its offerings in the future.
Unicorns and IPOs
India's start-up sector has seen a deluge of IPOs in 2021. The list includes PayTM, Nykaa, Zomato, PolicyBazaar, and PharmEasy.
This is partly because public sentiment was favourable, since Indian tech start-ups were getting attention from global investors. The economy had also made an unexpected recovery from the pandemic.
However, shares of these start-ups fell sharply during the recent stock market meltdown, indicating that the tech-unicorn craze might be over.
PayTM in particular eroded more than half of IPO investors' money in less than two months.
According to a PTI report, BoAt's parent company will use proceeds from the fresh issue towards payment of debt.
This will assist the company in maintaining a favourable debt to equity ratio and enable the utilisation of its internal accruals for further investment in business growth and expansion, the agency said.
(With inputs from Economic Times, Forbes, and PTI.)
Subscribe To Our Daily Newsletter And Get News Delivered Straight To Your Inbox.