Imagine Marketing, the parent company of the popular wearables and audio brand boAt, files draft papers for an initial public offering (IPO) through the confidential pre-filing route with the Securities and Exchange Board of India (SEBI). This move allows the company to keep certain details undisclosed until a later stage. The company had previously attempted an IPO in 2022 but later withdrew its plans.
Founded in 2013 by Aman Gupta and Sameer Mehta, boAt has become a dominant name in the Indian wearables market, offering smartwatches, earphones, speakers, and other mobile accessories. Despite a slight decline in revenue for FY24, the company reduced its net loss significantly. The confidential filing approach has been gaining traction among Indian startups, with firms like Tata Capital and PhysicsWallah following the same path. However, pre-filing does not guarantee the IPO will proceed.
1. Overview of boAt’s Business Model, Revenue, and Founders
1.1 Founding and Growth
Imagine Marketing launched boAt in 2013, targeting the affordable consumer electronics market in India. Co-founders Aman Gupta and Sameer Mehta envisioned a brand that could provide stylish and durable audio products for young Indian consumers. Their strategic partnerships, influencer-driven marketing, and aggressive online sales approach led to boAt becoming India’s top-selling audio brand.
1.2 Business and Revenue Model
boAt generates revenue by selling affordable yet premium-quality audio wearables and mobile accessories. Its omnichannel strategy includes direct-to-consumer (D2C) online sales, partnerships with e-commerce giants like Amazon and Flipkart, and offline retail expansion. The company also engages in collaborations with celebrities, sports leagues, and influencers to maintain high brand visibility.
1.3 Financial Performance and Funding
In FY24, boAt recorded revenue of Rs 3,121.6 crore, a 5% decline from the previous year’s Rs 3,284.7 crore. However, it significantly reduced its net loss by 48%, bringing it down to Rs 70.8 crore. The brand has raised funds from investors like Warburg Pincus and Qualcomm Ventures. Earlier, in January 2022, boAt had planned a Rs 2,000 crore IPO, but it later decided to postpone its public offering.
2. boAt Files for IPO Using Confidential Pre-Filing Route
2.1 Understanding the Confidential Pre-Filing Process
boAt’s decision to use the confidential pre-filing route means it has filed draft papers with SEBI but has not disclosed all details publicly. This approach, introduced under SEBI’s ICDR (Issue of Capital and Disclosure Requirements) Regulations, allows startups to finalize IPO plans without immediate scrutiny.
2.2 Why boAt Chose This Route
Several Indian companies have opted for this strategy to test investor sentiment before fully committing to a public offering. This method allows firms to revise or even withdraw their IPO plans based on market conditions, ensuring better valuation and preparedness.
2.3 Past Attempt at IPO and Withdrawal
boAt initially files for an IPO in 2022, aiming for a Rs 2,000 crore public issue, which included a fresh issue of Rs 900 crore and an offer for sale (OFS) of Rs 1,100 crore. However, market volatility and economic uncertainty led to the withdrawal of the plan.
3. Growing Trend of Confidential IPO Filings in India
3.1 Indian Startups Adopting the Approach
Confidential IPO filings are becoming increasingly popular in India. Recently, Tata Capital and PhysicsWallah filed for IPOs using this method. Other firms like Swiggy and Vishal Mega Mart successfully completed their IPOs after privately registering with SEBI.
3.2 Lessons from Previous Confidential Filings
Companies like OYO and Tata Play also explored this route but later withdrew their IPO plans. Tata Play was the first Indian company to use confidential pre-filing in late 2022, receiving regulatory clearance before deciding against going public.
3.3 boAt’s Position in the Market and IPO Prospects
boAt remains one of India’s leading wearable brands despite recent revenue declines. If market conditions improve, its IPO could attract strong investor interest, given its widespread brand recognition and dominant position in India’s Rs 10,000 crore wearable industry.
4. Learning for Startups and Entrepreneurs
4.1 Choosing the Right IPO Strategy
Startups looking to go public should carefully assess market conditions before deciding between a traditional or confidential IPO filing. boAt’s cautious approach highlights the importance of flexibility in financial planning.
4.2 Adapting to Market Conditions
boAt’s revenue dip and reduced losses show how businesses can pivot and optimize operations to maintain investor confidence. Startups must focus on cost control and brand positioning to stay competitive.
4.3 Importance of Brand Loyalty and Diversification
boAt’s marketing strategy, leveraging celebrity endorsements and influencer collaborations, has been a key driver of growth. Entrepreneurs can learn from this by investing in strategic brand-building initiatives.
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