boAt Withdraws IPO Plans, Raises Rs 500 Crore To Accelerate Smartwatches Category

Updated on: 28 October 2022 10:35 pm

Raising $120 Million, Udaan Likely to Delay Its IPO Photo: Udaan hit a positive contribution margin in the last quarter of the fiscal year 2021

Aman Gupta and Sameer Mehta-led consumer electronics brand boAt has closed an investment round of $60 million (nearly Rs 500 crore) through the issue of convertible notes. This round saw the participation of a new investor Malabar Investments and along with existing backer Warburg Pincus.

Imagine Marketing, which own the boAt brand, has also formally withdrawn its Initial Public Offering (IPO) plans due to the current market situation. The company had filed a draft red herring prospectus with the Securities and Exchange Bureau of India (SEBI) on 26 January 2022 for an IPO where it hoped to raise Rs 2,000 crore.

The company planned to expand its market by reaching a valuation of $1.5 to $2 billion through this IPO, which now stands suspended. However, sources claim that it might opt for a listing in the future.

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For now, neither Malabar Investments or Warburg Pincus have subscribed to any equity in the company. However, if boAt organises an IPO or completes another round of funding, both firms will get equity from these notes.

boAt is expected to use these fresh funds to fuel its smartwatches category and enhance the audio accessories segment in India and overseas. The company will also augment its local manufacturing centers In addition to improving its R&D facilities.

Since entering the smartwatch industry a couple of years ago, boAt claims to have established its footprints in this fast-growing space. “We are very excited about the potential of smartwatches. The market today is in the early stages of evolution and most players don’t have control over the end-to-end stack to offer compelling features to consumers. There is a significant opportunity to build the category and launch more distinctive and technologically advanced products,” co-founder and chief product officer of boAt, Sameer Mehta told.

In FY 2020-21, Imagine Marketing generated Rs 1.3 billion in revenues. According to AngelOne stock broking house its business has developed steadily over the years, with a return on capital of more than 15 per cent in the last three fiscal years and 66.8 per cent in the most recent fiscal year.