About eight out of ten BoAt products are sold on Amazon and Flipkart, but the company has concerns around it

• Imagine Marketing, owner of electronics brand BoAt, has filed for a ₹2,000 crore IPO out of which shares worth ₹1,100 crore will be sold by promoters.
• Reportedly, the company is eyeing a valuation of $1.5-2 billion in the IPO.
• The consumer electronics company gets 86% of its revenue from online marketplaces like Amazon, Flipkart, who in the past have delayed payments for the firm.

Nearly nine out of ten BoAt’s products (85.84% of sales) are sold on online platforms like Amazon and Flipkart as of 2021. However, the company has stated this as a risk factor to its revenue in its draft red herring prospectus (DRHP).

The company earns 83.72% of the revenue from selling its products on Amazon and Flipkart. However, in the past the company has faced issues in collecting payments from online platforms.

“In the past, due to temporary changes in the operations of certain online marketplaces, we experienced delays in collecting payments from such parties…Additionally, unexpected changes in inventory levels or other practices by the online marketplaces and our distributors or other their retail outlet customers could negatively affect our business, cash flows and results of operations,” said BoAt in its DRHP.

Imagine Marketing, owner of electronic brand BoAt, has filed for a ₹2,000 crore initial public offering (IPO). Reportedly, the company is eyeing a valuation of $1.5-2 billion in the IPO.

BoAt manufactures and sells a variety of electronic products such as headphones, fitness wearables, smartwatches, gaming controllers, charging cables, portable battery packs, earphones, and other mobile accessories. It has adopted a digital-first strategy, wherein it largely focuses on online sales rather than offline retail sales.

The IPO will consist of ₹1,100 crore of offer for sale by promoters and ₹900 crore of fresh issue by the company.

Co-founders Aman Gupta and Sameer Mehta will dilute their stakes worth ₹150 crore each in the company and investor South Lake Investment will also sell shares worth ₹800 crore in the IPO

Of the total fresh issue of ₹900 crore, the firms will use ₹700 crore to pay debt. As of December 2021, the company had total secured and unsecured borrowings of ₹764 crore.

The consumer electronic company’s financial performance has been on an upward trend in the last three fiscal years.


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