Check out how boAt sets course for public debut: considers IPO soon
Imagine Marketing India, the parent company of popular audio products and smartwatch maker boAt, is currently engaged in strategic talks with potential investors to raise capital. This move comes at a time when the company is focusing on solidifying its financial foundation and preparing for a public offering in the near future.
Strategic Fundraising Efforts
According to Sameer Mehta, co-founder and CEO of boAt, the company is in discussions with three distinct types of investors: a large global fund, a sovereign fund, and a strategic investor. In an interview with the Economic Times, Mehta emphasized that the fundraising initiative is strategic, aimed at enhancing boAt’s market positioning rather than simply gathering capital. The company is not in urgent need of funds but is exploring these opportunities to strengthen its strategic alliances and expand its technological capabilities.
Financial Health and Profitability
boAt has been focusing on improving its financial metrics, particularly turning profitable again in the current fiscal year (FY25). The company achieved EBITDA profitability in FY24 and is on track to become net profitable once more this fiscal year. These improvements are critical as they align with boAt’s plans to go public.
IPO Plans on the Horizon
The prospect of an IPO is significant for boAt. Mehta outlined that the company aims to go public only after it has achieved profitability in FY25. The anticipated IPO is expected to raise around INR 2,000 Cr. The timeline for the IPO, slated for the next 12-18 months, will depend on how quickly boAt can enhance its financial ratios, such as return on capital employed and net profit margins.
It’s noteworthy that this will be boAt’s second attempt at launching an IPO. The company had previously filed its draft red herring prospectus with the Securities and Exchange Board of India (SEBI) in 2022 for a similar amount. Although the IPO was approved in May 2022, the plans were subsequently put on hold, with co-founder Aman Gupta citing no rush to go public within the next few years.
Market Dynamics and Product Strategy
The wearables market, particularly at the entry level, is currently experiencing intense price competition, with prices reaching record lows. Despite these challenging conditions, Mehta is optimistic about the market’s recovery and expects a turnaround within the next one to two years.
To capture market share and drive revenue growth, boAt is focusing on specialized wearables targeting diverse consumer segments, including children, older people, and users focused on sports, health, and wellness. This strategy aims to differentiate boAt from competitors, especially from the influx of lower-priced Chinese products that dominate the entry-level segment.
Conclusion
boAt’s strategic approach to fundraising and its meticulous preparation for an upcoming IPO highlights its prudent management and ambitious growth plans. By focusing on becoming financially robust and differentiating its product offerings in a competitive market, boAt is positioning itself as a leader in the audio and wearable technology sector. As the market conditions evolve, boAt’s strategies could set a precedent for how tech companies navigate growth and market challenges in dynamic environments.
