boAt—the popular homegrown audio and wearable brand—has taken another step toward going public. After a delay in 2022, the company is now preparing for a $300-$500 million Initial Public Offering (IPO) and has onboarded three big bankers—ICICI Securities, Goldman Sachs, and Nomura—to help navigate the process. But will this IPO be the ticket for boAt’s long-term growth, especially after a challenging fiscal year? Let’s dive into the details.
boAt’s IPO Journey: The Second Attempt
boAt, known for its stylish audio products like headphones and earphones, filed for an IPO back in 2022, but those plans were put on hold due to unfavorable market conditions. Instead of moving forward, the company raised $60 million from investors like Warburg Pincus and Malabar Investments, which valued boAt at around $1.2 billion. However, with changing market dynamics and a slight rebound in sales, boAt is now revisiting its IPO plans with a fresh target for 2024.
The brand aims for a $300-$500 million IPO, potentially valuing boAt at over $1.5 billion. This marks the company’s second attempt at going public, with ICICI Securities taking the lead as the main banker, supported by Goldman Sachs and Nomura.
The Financials: Declining Revenue, Halved Losses, and Positive EBITDA
The announcement of boAt’s IPO plans comes during a time of mixed financial results. In the fiscal year 2023-24 (FY24), the company saw its revenue dip by 5%, dropping from INR 3,376.8 crore to INR 3,285 crore. However, there’s a silver lining: the company managed to halve its losses, bringing them down to INR 70.8 crore compared to the previous year.
The good news is that boAt recorded positive EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) in FY24, indicating healthier operational performance despite the revenue dip. Sources suggest that the Diwali season sales boost helped lift the company’s fortunes after a series of quieter quarters.
While these financial results may not look spectacular at first glance, they demonstrate resilience in a competitive and fluctuating market.
boAt’s Strategic Growth Plans
Despite the financial setbacks, boAt is continuing its expansion efforts. As part of its growth strategy, the company is eyeing an international presence, with plans to launch operations in the UAE. Co-founder Aman Gupta confirmed this during the ET Soonicorns Summit in September, emphasizing the brand’s goal to broaden its market beyond India.
Additionally, sources close to boAt suggest that the company is reworking its IPO plans to better reflect its current business model. The idea is to capture the company’s entire business ecosystem, highlighting not just its audio products but also its ventures into wearables and other tech-driven segments.
Market Conditions: Will the IPO Be a Success?
boAt’s decision to push forward with its IPO at this time comes when the market is showing signs of cautious optimism. While the company faces tough competition in the wearables and audio segments, it is far from alone in its IPO aspirations. Other tech-driven firms, such as Swiggy and FirstCry, have gone public recently, with Swiggy’s IPO performing better than expected. But it’s clear that these companies are adopting a more conservative approach to listing, adjusting their IPO pricing based on current market conditions.
For boAt, much depends on the timing of its IPO. Given the current wave of new-age companies going public and the recent sales boosts during festive seasons, boAt might be positioning itself at the right moment. However, it’s clear that the company will need to adjust its valuation and business narrative in response to market feedback.
What’s Next for boAt?
As boAt gets closer to filing its final IPO papers, the focus will likely shift toward building investor confidence. This involves presenting a solid growth story, despite recent challenges. ICICI Securities leading the charge as the primary banker signals that the company is serious about making its public debut.
Though the revenue dip is a concern, the company’s ability to navigate tough times—along with its continued product innovation and international expansion plans—could help offset those concerns. boAt’s strong brand recognition, especially in India, will also play a crucial role in generating interest from potential investors.
Conclusion: Is boAt Ready to Take the Public Leap?
boAt’s upcoming IPO, targeted for next financial year, is a significant milestone in the company’s journey. While the company has faced some financial headwinds, its continued growth, positive EBITDA, and plans for international expansion make it an interesting contender for potential investors. With a fresh batch of investment bankers and a reworked strategy, boAt might just be on the brink of successfully navigating the IPO waters this time.
