Imagine Marketing Ltd IPO

Upcoming DRHP

IPO Synopsis

Imagine Marketing, parent company of BoAt, has filed its preliminary papers with SEBI to raise Rs 2,000 crore via an initial public offering (IPO).
The public issue consists of a fresh issue of equity shares, aggregating up to Rs 900 crore and an offer for sale aggregating up to Rs 1,100 crore. boAt co-founders Aman Gupta and Sameer Mehta will dilute their stakes worth Rs 150 while South Lake Investment Ltd will also sell shares worth Rs 800 crore.
Axis Capital Limited, BofA Securities India Limited, Credit Suisse Securities (India) Private Limited and ICICI Securities are the book running lead managers.

Objective of the Issue 
The proceeds from the issue will be used towards:
1. Repayment/prepayment of certain borrowings availed of by the company 
2. General corporate purposes

About Imagine Marketing Ltd

Imagine Marketing is one of the largest Indian digital-first brands in terms of revenue from operations for the FY21. The company offers a wide-ranging, high-quality and aspirational lifestyle-focused consumer products at accessible price points. The company was founded in 2013 and later in 2014 its flagship brand “boAt” was launched. 

The products offered across a variety of price points and customer segments across multiple product categories, include 
1. Audio (wired headphones and earphones, wireless headphones and earphones (neckbands), true wireless stereo (“TWS”), Bluetooth speakers and home theatre systems and sound bars), 
2. Wearables (smartwatches),
3. Gaming accessories (wired and wireless headsets, mouse and keyboards), 
4. Personal care appliances (trimmers and grooming kits) and 
5. Mobile accessories (chargers, cables, power banks and other accessories)

Moreover, in terms of volume, the company commands a market share of 48% and 23%, in both wireless hearables and smartwatch segments, respectively, which has consistently increased over time, and it had a market share of 30% and 13% by value, in the branded wireless hearables and smartwatch markets, respectively.

The company benefits from collaborations and relationships with industry participants such as Qualcomm Bharat FIH Ltd, Google, Dolby International AB, Dolby Laboratories Licensing Corporation, Airoha Technology Corp. and Realtek Semiconductor Corp and integrate components and technology developed by them in its products, thereby enabling to offer wide-ranging, high quality and aspirational lifestyle-focused consumer products at accessible price points.

The company has a diverse set of manufacturers and product developers across China, Vietnam and India and have entered into exclusive agreements with a number of them to manufacture products using design specifications and standards established by the company.

Profit and Loss

Balance Sheet

Particulars (in Rs. Crores) FY21 FY20 FY19
Revenue 1313.72 609.11 225.85
EBITDA 133.30 75.94 14.14
PAT 86.54 47.80 8.04
Particulars (in Rs. Crores) FY21 FY20 FY19
Total Assets 678.43 190.50 83.93
Share Capital 0.05 0.05 0.05
Total Borrowings 41.53 48.81 26.74
Particulars (in Rs. Crores) FY21 FY20 FY19
Net cash generated from / (used in) operating activities -142.10 1.86 -26.00
Net cash from / (used in) investing activities -6.66 -7.15 -0.25
Net cash flow from / (used in) financing activities 270.78 18.28 20.82
Net increase (decrease) in cash and cash equivalents 122.02 12.99 -5.42

Peer Comparison

There are no listed companies in India that engage in a business similar to this company.

IPO Key Points

  • Strengths:

    1. One of the largest Indian digital-first brands with leading market positions across multiple fast-growing product categories
    2. The flagship brand “boAt” is a consumer brand with strong market positioning and a clear value proposition
    3. It is the digital-first platform capabilities are targeted to enable growth and continue to allow it to build a presence across multiple consumer categories

  • Risks:

    1. Success depends on the success strength of flagship “boAt” brand and other brands and need to maintain and develop its brands
    2. Failure in successfully identifying and responding to changing customer preferences and market developments in a cost-effective and timely manner
    3. Failure to compete successfully against existing or new competitors, which may reduce the demand for the products and services which may lead to reduced prices
    4. Relies on a number of third-party contract manufacturers and component suppliers for production of the products
    5. Subject to risks associated with overseas procurement, such as geographical concentration and foreign currency exchange risks,
    6. Heavily reliant on its relationships with certain online marketplaces and offline distributors, hence any disruptions could adversely affect the business

How to apply for IPO?

  • Login to your 5paisa account and select the issue in the current IPO section

  • Enter the number of lots and price at which you wish to apply for

  • Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange

  • You will receive a mandate notification to block funds in your UPI app

  • Approve the mandate request on your UPI and funds will be blocked