boAt’s IPO Boat Has Sailed! Becomes 1st Indian D2C Brand Heading For Public Listing

As reported by Inc42 last week, Delhi-based headphone maker boAt which is operated by Imagine Marketing Limited has filed INR 2,000 Cr DRHP with the market regulator SEBI. As per the documents reviewed by Inc42, the D2C brand’s offer consists of INR 900 Cr of fresh issue of shares, and upto INR 1,100 Cr for offer-for-sale. 

Inc42 had earlier this week exclusively reported that boAt has converted into a public company – a mandatory requirement for filing DRHP – and was planning to file the DRHP this week. 

As per the DRHP documents, founders Aman Gupta, and Sameer Mehta will be offloading shares upto INR 150 Cr both. Among investors, South Lake Investment LTD will be offloading upto INR 800 Cr during the IPO. 

The DRHP documents further revealed that boAt may further consider a pre-IPO round. The startup in consultation with Book Running Lead Managers (BRLMs) likely to raise upto INR 180 Cr as pre-IPO placements. 

The startup’s BRLMs are Axis Capital, BofA Securities, Credit Suisse, ICICI Securities, and Link Intime. 

In terms of shareholding pattern, both the founders Sameer Mehta, and Aman Gupta hold 28.26% of equity share capital on a fully diluted basis. This means, both the founders hold a total of 56.52% in the company. boAt is likely to be the second Indian startup company heading for an IPO where the promoters hold more than 50% stake, thus giving them the control of the company. 

Inc42 had earlier this week exclusively reported that proptech startup Square Yards’s founders, management, and employees who hold 55% stake in the company are unlikely to offload their shares during its INR 1,500 Cr IPO. 

Similarly, fashion ecommerce giant – Nykaa – which went for INR 5,000 Cr IPO earlier in October, continues to be under total control of the promoters of the company – the Nayar Family. Former investment banker Falguni Nayar, who founded the company, along with her husband, and two children continue to hold around 51% in the company post IPO. 

South Lake is the third largest shareholder with 36.48% in the D2C brand, followed by Fireside with 3.76% and Qualcomm with 2.60% stake. 

As per the documents, the startup intends to utilise the net proceeds of the IPO for repayment/ prepayment, in full or part, of certain borrowings and for general corporate purpose. 

The startup between April and September of 2021 clocked INR 1,547.8 Cr with total revenue of INR 1,553.1 Cr. During the same period, boAt saw its expenses touch INR 1,394.7 Cr, with a profit after tax of INR 118.3 Cr. 

In FY21, boAt  posted INR 1,313.7 Cr in earnings from operations, as compared to INR 609 Cr in FY20. The startup’s expense rose to INR 1,202.1 Cr in FY21, from INR 544.7 Cr in FY20. In the last financial year the startup posted a total profit after tax of INR 86.5 Cr, a sharp rise from INR 47.7 Cr.