Imagine Marketing, the owner of the boAt consumer electronics brand, has applied to the Securities and Exchange Board of India (SEBI) for permission to fund Rs 2,000 crore through an initial public offering (IPO). According to the company’s draught red herring prospectus (DRHP), the IPO will include a fresh issue of Rs 900 crore of shares and an offer for sale of up to Rs 1,100 crore of existing shares.
According to the statement, boAt co-founders Aman Gupta and Sameer Mehta would reduce their shareholding in the firm worth Rs 150 crore apiece, and boAt investor South Lake Investment Ltd will sell shares worth Rs 800 crore. The revenues from the new offering will be used to pay down debt.
In compliance with Sebi norms, the company may also contemplate involvement by anchor investors, according to the registration documents. Shareholders may consider a pre-IPO placement of up to Rs 180 crore of selected securities through a private placement, preferential offer, or any other manner, at their discretion, before the filing of the Red Herring Prospectus with the registrar of companies, it added. Warburg Pincus, a private equity firm based in the United States, supported boAt when it was formed in 2016. The IPO float is projected to value the company at $1.5-2 billion.
The debt payment will allow the corporation to keep a favorable debt-to-equity ratio and use internal accruals for additional investments in business growth and expansion.
As of September 30, 2021, the company had established dominating market positions in India in terms of volume and value across a variety of high-growth consumer categories, including audio and smartwatches, led by its flagship brand BoAt, which debuted in 2014.
With a CAGR of 141 percent in operating revenue from FY19 to FY21, while maintaining profitability, the company has a track record of rapid and sustainable growth. Axis Capital Limited, BofA Securities India Limited, Credit Suisse Securities (India) Private Limited, and ICICI Securities (India) Private Limited are the book running lead managers.