Boat files draft IPO papers: key takeaways

Mumbai: Imagine Marketing, the parent company of Boat, one of the largest direct-to-consumer (D2C) brands in India, filed its draft red herring prospectus for an initial public offering on Thursday.

The Warburg Pincus-backed company is looking to hit the capital markets by the first quarter of the next financial year. It is expected to seek a valuation of around $1.5-$2 billion in the offering, ET had reported earlier this week.

Founded in 2016, the company was last valued at around Rs 2,200 crore when it raised Rs 50 crorefrom Qualcomm Ventures last April, ET had reported.

Wearables are a big part of the focus for the company as it looks to widen its offerings under the brand. Within a year of launching the business, Boat said it was among the top two players in the sector with a 20% market share. 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.

Here are the key takeaways from the DRHP:

Issue size: The company said it is looking to raise Rs 2,000 crore, of which Rs 900 crore will be raised by issuing new shares while Rs 1,100 crore will be raised through an offer for sale, in which existing investors will sell some of their shares.

Offloading stakes: Private equity major Warburg Pincus, the single largest shareholder in Boat with around 36% stake, will divest shares worth Rs 700-800 crore in the IPO, which will be of fresh stock and an offer for sale. Cofounders Aman Gupta and Sameer Mehta, who own around 56% of the firm, are expected to dilute a minor part of their holding.


What will the funds be used for? The company plans to use the IPO proceeds to repay or prepay debt.

Financials: For the six months ended September 2021, Boat's operating revenues have surpassed FY21 figures and stand close to Rs 1,550 crore with net profits surging to Rs 118 crore.


Pre-IPO placement: The company may consider a pre-IPO round. It is in consultation with book running lead managers and is likely to raise upto Rs 180 crore before the offering.

Boat joins the IPO party

By filing for an IPO, Boat joins a growing number of Indian startups that are looking to tap the public markets or have done so already. 2021 was a signal year for tech startup IPOs in India, with the likes of Zomato, Nykaa, Paytm, Policybazaar listing on the bourses.

But these companies’ share prices have taken a beating in 2022, thanks in part to a huge sell-off in US tech stocks as investors anticipate interest rate hikes.