Direct-to-consumer (D2C) firm Boat, an Indian consumer electronics company owned by Imagine Marketing Ltd, has filed its documents with the Securities Exchange Board of India (SEBI) for a Rs 2,000-crore initial public offering (IPO).
Here are a few takeaways from Boat’s IPO Prospectus
The company, which was founded in 2014, is backed by Fireside Ventures, Qualcomm Ventures LLC and South Lake Investment Ltd, an affiliate of the Warburg Pincus Group.
In the IPO, there will be a fresh issue of Rs 900 crore and an offer for sale (OFS) of Rs 1,100 crore by its existing promoters and shareholders. Each founder will put up a sale of up to Rs 150 crore worth of shares, respectively. South Lake Investment is looking to sell shares worth Rs 800 crore, according to the documents.
Despite having marquee investors, the founders of the company - Sameer Mehta and Aman Gupta - together own over 50% of shares in the company as each have 28.26% stake each.
Boat has established leading market positions in volume and value terms in India across multiple, high-growth consumer categories including audio and wearables.
The Mumbai-based D2C brand heavily relies on online marketplaces which the company has also highlighted as a risk factor.
“We rely on these contract manufacturers to manufacture our products, and our contract manufacturers, in turn, rely on third-party suppliers for many of the components used in our products. For the financial years 2019, 2020 and 2021 and the six months period ended September 30, 2021, ₹1,160.92 million ($15.4 million), ₹3,408.33 million ($45.3 million), ₹7,176.18 million ($95 million) and ₹9,910.81 million ($131.8 million), or 57.79%, 69.34%, 57.19% and 60.73% of our purchases of stock-in-trade were made from five of our most used suppliers, respectively,” it said.
The company has also added that a potential geopolitical tension between India and China could affect the company’s business.
Last year, between April and September of 2021, the company clocked Rs 1,547.8 crore with a total revenue of Rs 1,553.1 crore. In FY21, it posted Rs 1,313.7 crore in earnings from operations, which was a significant rise from Rs 609 crore in FY20.