Boat sets sail for IPO in 2025, targets $300-500M raise
What's the story
Boat, one of the leading Indian brands in the wearable and audio space, is gearing up for an initial public offering (IPO) next year. The company has hired ICICI Securities, Goldman Sachs, and Nomura as bankers for the same. The IPO is likely to raise between $300 million and $500 million. The move comes as part of a growing trend of new-age companies going public.
Financial history
Boat's valuation and previous funding efforts
Reportedly, Boat is eyeing a valuation of over $1.5 billion, but these numbers could change as the IPO filing date nears. The company had earlier filed draft papers for a public offering in 2022 but delayed the plans due to market conditions. It had then raised $60 million in private capital via convertible preferred stocks notes from existing back Warburg Pincus and new investor Malabar Investments at a minimum valuation cap of around $1.2 billion.
Revenue report
Boat's financial performance and market position
Despite a 5% revenue drop in FY24 to ₹3,285 crore, Boat was able to cut its losses in half to ₹70.8 crore. The company also reported positive earnings before interest, taxes, depreciation, and amortization (EBITDA) in FY24. According to IDC data, Boat is India's largest wearables company with a 26.7% market share in Q2 2024.
Expansion strategy
Boat's future plans and market challenges
Boat's IPO plans come at a time when the audio segment has witnessed a sales boom this festive season but the wearables market remains slow. The company has also announced plans to expand operations into the UAE. However, it is struggling in the wearables department with cautious inventory management and fewer new product launches, which resulted in a 10% YoY decline in shipments in Q2 2024.
Business forecast
Boat's business performance and future outlook
Boat observed that its audio business stayed stable in H2 FY24, with a transition to online sales. However, both the headphone and speaker segments witnessed flat results. Despite these hurdles, Boat expects an improvement in EBITDA and profit before tax (PBT) margins for FY25. This optimism stems from efforts like optimizing warranty costs and cutting advertising and promotional expenses.