Homegrown wearable and audio products brand Boat has finalised ICICI Securities, Goldman Sachs and Nomura as bankers for a $300-500 million IPO next year, sources aware of the matter said, joining the queue of new-age firms looking to go public. New Delhi-based Boat may aim for a valuation of over $1.5 billion, sources said, adding these numbers may change closer to the IPO filing. It’s targeting a public offer in next financial year.
Boat had filed draft papers for a public offering in 2022 but halted those plans citing market conditions and raised $60 million in private capital through convertible preferred stocks notes from existing investor Warburg Pincus and new investor Malabar Investments at a minimum valuation cap of around $1.2 billion.
“ICICI Securities is the lead banker for the issue and they are looking to file for next financial year,” one of the persons said. “In total they have finalised four bankers.”
‘Consolidation underway’
This comes as Boat’s revenue fell 5% in FY24 to Rs 3,285 crore, while it halved losses to Rs 70.8 crore. Sources said there’s a consolidation underway in the sector and that the recent Diwali season lifted sales after several muted quarters. Boat recorded positive earnings before interest, taxes, depreciation, and amortisation (ebitda) in FY24.
Spokespersons for Boat and Goldman Sachs declined to comment while emails sent to the other bankers mentioned above didn’t elicit any response.
While Swiggy made a better-than-expected debut on stock exchanges with its $1.3 billion IPO on Wednesday, several new-age firms like FirstCry, Ola Electric, Awfis and others have gone public this year with many going cautious on their listing price compared with their last private valuation.
“They have been internally following the IPO reporting process since they already filed the draft IPO papers once,” said one of the persons cited. “The idea is to redraw the plan capturing all its business,” one of the sources said. The company plans to launch operations in the UAE, cofounder Aman Gupta said at the ET Soonicorns Summit in September.
Boat’s IPO plans come at a time when the audio segment has seen sales growth during the festive season but the wearables business remains sluggish.
The wearables segment—which includes wireless audio devices and smartwatches—witnessed a 10% year-on-year decline in shipments during the June quarter amid cautious inventory management and fewer new product launches, according to market tracker IDC.
Boat noted that the audio business was flat in the second half of FY24, with a shift toward online sales. The headphone segment experienced a decline even against a low base, and the speaker business also posted flat results.
Started by Gupta and Sameer Mehta in 2015, Boat has raised $171 million to date, according to data from Tracxn. Boat is the largest wearables company in India with a 26.7% market share in the second quarter of 2024, per IDC data.
The company’s focus on building its wearables business through marketing and pricing strategies has impacted profitability. In the wearables segment, there was a price war among the top players in the space leading to a steep decline in average selling price, which led to margin pressure.
For FY25, Boat still anticipates an improvement in ebitda and profit before tax (PBT) margins, driven by initiatives such as optimising warranty costs and reducing advertising and promotional expenses.
