About The IPO
Boat is one of the rare hardware startups of India. It has filed for an IPO of up to Rs 2,000 crore, of which the new issue is Rs 900 crore and on offer for sale of Rs 1,100 crore. The largest shareholder in Boat is Warburg Pincus (36% stake). It will divest shares worth Rs 700-800 crore. South Lake Investment is looking to sell shares worth Rs 800 crore. Meanwhile, the co-founders Aman Gupta and Sameer Mehta (28.1% stake each) are expected to dilute only a minor shareholding. Each founder could offload Rs 150 crore worth of shares.
The company wants to use the IPO proceeds to repay or prepay debt. It may also consider raising over Rs 150 crore in a pre-IPO round. Valuation-wise, the company was valued at around Rs 2,200 crore last year when it was raising Rs 50 crore from Qualcomm Ventures.
Is The Industry Ripe For Boat?
Fitness and wellness lifestyle is catching momentum. The young generation loves technology and that’s why the wearables market is floating with money. And guess what Boat is among the top two players in the wearables market. Boat had over 30% of the wearable market in India and was the fifth-largest brand globally in the category as of early last year, according to marketing research firm IDC. According to the company, the wearables market in India is expected to grow more than 10 times $2-4 billion by 2025 from $200 million in 2018.
Now, if we talk about Boat’s products, it manufactures and sells headphones, fitness wearables, smartwatches, charging cables, portable battery packs, and other mobile accessories. These devices are available at a low cost with premium aesthetic offerings. It has its own set of audience who are happy with the products they offer.
What Lies Ahead?
Boat is well placed in the Indian fitness market. After Apple’s products, Boat offers similar products at an affordable price, which is all that the customers want. Similar technology at a cheaper price. On the financial side, the company said that it has grown its operating revenue at a CAGR of 141% from FY19 to FY21. All these factors will support the IPO and help it receive a healthy listing.