About the Company – Imagine Marketing Ltd (boAt)
Imagine Marketing Ltd (boAt) is an India-based electronics brand founded in November 2013. Known for marketing audio-focused smart wearables and accessories. The business is carried under a legal name, Imagine Marketing Services Private Limited.
boAt designs and markets smartwatches and audio-focused accessories, like earphones, travel chargers, stereo headphones, home audio equipment, wireless speakers, premium rugged cables, and a comprehensive collection of mobile phone accessories. Furthermore, boAt markets its products through public events and collaborations with various influencers and sports teams.
Website: www.boat-lifestyle.com
Financial Highlights – Imagine Marketing Ltd
| Financial Year | Total Assets in Crores | Total Revenue in Crores | Profit After Tax in Crores |
|---|---|---|---|
| FY 2021 (as of 30 September 2021) | Rs. 2,093.73 | Rs. 1,313 | Rs. 86 |
| FY 2020 | Rs. 190.50 | Rs. 609 | Rs. 47 |
| FY 2019 | Rs. 83.93 | Rs. 225 | Rs.8 |
Positive on boAt’s business model
- Offline + Tier2+ Cities expansion : Leveraging existing distributors and their relationships with local retailers. Plus using online platforms to service more areas
- Market Leader on online e-com platforms : Digital channels and marketplaces account for more than 85 per cent of the company’s total sales, and it maintains its position as the leading brand on those marketplaces.
- Synergies: In the interest of improving its products, the company has sought out relationships with component suppliers like Qualcomm (a shareholder in the parent company), Google, Dolby, and Bharat FIH.
- Profitable for last 3 FYs
- Asset Light Approach : The company leases out offices and warehouses instead of purchasing them so that capital expenditure remains minimal.
- High ROCE of 60%+ : 15 per cent in the last three fiscal years and 66.8 per cent in the most recent fiscal year.
Pros of investing in boAt IPo
- Imagine Marketing Ltd (boAt) is one of the largest digital-first brands in India, that holds leading market positions.
- It is a consumer brand with a clear value proposition and a strong market position.
- Distinctive marketing capabilities can generate greater consumer engagement and high sales levels effectively.
- Backed by real-time feedback from sales channels and customers, the company can develop products on a timely basis and stock those that are most in-demand.
- The in-house design team of boAt Labs has worked on several projects aimed at improving the products of the company. boAt says that this has helped it to create a product line tailored to the Indian market.
Cons of investing in Imagine Marketing Ltd (boAt) IPO
- The company has to rely on several third-party suppliers to produce its products.
- Similarly, the company has to rely on its relationship with digital marketplaces and offline retailers.
- The gross margins can be affected by the occurrence of pricing pressures from marketplaces and consumers.
Understanding Imagine Marketing Ltd (boAt) Valuation
| Number of Shares Outstanding (in INR Cr.) | 13.54 |
| Price Per Share (as on 19th September 2022) | 750 |
| Current Market Cap (in INR Cr.) | 10,159 |
| Current Market Cap (in USD Bn.) | 1.28 |
| IPO Valuation (in USD Bn.) | 1.5 |
| IPO valuation (in INR Cr.) | 11,955 |
| Potential upside (in %age) | 17.19% |
Tentative valuation for IPO has been taken from relevant news sources. https://economictimes.indiatimes.com/tech/startups/boat-set-to-float-rs-2000-crore-ipo-eyes-1-5-2-billion-valuation/articleshow/89127606.cms.
In case the IPO guidance varies the calculations will have to be updated accordingly.
As per estimates, 600-700 looks might be a good range to invest in boAt. Caution should be exercised at prices higher than that.
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