boAT delays IPO plans, raises ₹500 crore in fresh equity

Imagine Marketing Pvt Ltd, the parent company of the consumer electronics startup boAT, has raised ₹500 crore in fresh equity from existing investors Warburg Pincus and new investor Malabar Investments, in order to expand the smart watches business. The company has also delayed its initial public offering citing tough market conditions. 

Through the new funds, the company is also planning to strengthen its audio segment, enhance its research and development (R&D) and design capabilities, and focus on manufacturing, in line with the country’s ‘Make-in-India’ initiative. 

Aman Gupta, co-founder & chief marketing officer, of boAT says, "We have established clear leadership in our core personal audio category and are the number two player globally in earwear. 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 has already partnered with companies like Qualcomm, which is also a shareholder in boAT, Dolby and Dirac amongst others to expand its smart wear business. 

"Through boAt labs (our 120-person in-house R&D team) and our acquisition of KaHa Technologies, (a world-class wearables technology and IoT platform, with 64 patents and patent applications), we are developing the next generation of products. These products will provide richer features and deeper insights to consumers on their health and wellness to enable them to lead more active and fulfilling lifestyles," says Sameer Mehta, co-founder and chief product officer of boAt. 

boAT's IPO

The company had filed its draft red herring prospectus (DRHP) for an initial public offering with the Securities and Exchange Board of India (SEBI), to raise ₹2,000 crore in January this year. The ₹2,000 crore IPO consisted of a fresh issue of shares worth up to ₹900 crore and an offer for sale of shares worth up to ₹1,100 crore, according to the company's draft prospectus.

The company had planned to utilise the proceeds of the IPO to repay and prepay its borrowings. Through the IPO, the company’s co-founders were also planning to pare their stake worth ₹150 crore each and its investor South Lake Investment was planning to sell shares worth ₹800 crore. 

 However, like its peers such as Oyo, and PharmEasy among others, the consumer electronics major has put its plan for IPO on the backburner citing the tough market conditions. The development comes at a time when shares of recently listed start-ups such as Zomato, Delhivery, Policybazaar, Nykaa, CarTrade and Paytm, have fallen to record lows. 

As per a report by the market research firm International Data Corporation (IDC), boAt is the second largest brand in the wearables category in India, cornering a 23.1% market share in the third quarter of 2021. The company reported net revenue of ₹3,000 crore for FY21.