boAt Files Draft Red Herring Prospectus with SEBI

boAt, a prominent name in the consumer electronics sector, has submitted its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) through a confidential filing process. The news was shared through various newspaper announcements on Monday.

The pre-filing process, which was initiated in 2022, permits businesses to submit their Draft Red Herring Prospectus (DRHP) directly to SEBI, ensuring that the document remains confidential until they solidify their initial public offering (IPO) intentions. This initiative is designed to give companies increased flexibility and privacy while they prepare for a public listing.

boAt’s Business Model and Market Impact

boAt was established by Aman Gupta and Sameer Mehta and operates using a direct-to-consumer (D2C) business strategy. The brand is committed to offering stylish, affordable, and high-quality audio devices, wearables, and accessories. It achieves substantial sales through online platforms such as Amazon and Flipkart, its own website, as well as a robust offline presence in retail stores.

To date, boAt has successfully raised over $170 million, with a notable $60 million funding round led by Warburg Pincus and Malabar Investments in 2023. As per insights from various startup data intelligence sources, Warburg Pincus stands as the largest external investor, accompanied by Fireside Ventures and Qualcomm.

Financial Performance Overview

In the fiscal year ending March 2024, boAt experienced a slight reduction in scale, with revenues declining by 5% to Rs 3,122 crore, down from Rs 3,285 crore in FY23. Nevertheless, the company succeeded in reducing its losses by 47%, bringing them down to Rs 53.5 crore during the same timeframe.

The wearable market in India faced a setback, witnessing a 20.7% year-on-year decline to 38 million units in Q3 2024, marking a second consecutive quarterly decrease, as reported by IDC. This drop can be attributed to a limited number of product launches and careful inventory management, even amidst the festive season. Interestingly, the average selling price saw a rise of 1.3% to $21.3, the first increase since Q2 2019.