OBJECTS OF THE OFFER :
The offer comprises of fresh issue of ₹9,000 mn out of which ₹7,000 mn will be used for repayment and prepayment of certain borrowing availed by the company and balance for general corporate purpose. The object also comprises of the offer for sale up to ₹11,000 mn. The company won’t be receiving any proceeds from the offer for sale.
BOAT IPO ANALYSIS
CONSISTENT TRACK RECORD OF FINANCIAL PERFORMANCE:
The company has seen stellar growth in its revenue in FY21, increasing from ₹2,258.49 mn in FY19 to ₹13,137.16 mn in FY21. The company’s EBITDA increased from ₹141.40 mn in FY19 to ₹1,344.77 mn in FY21. The company’s profit increased from ₹ 80.37 mn in FY19 to ₹ 865.37 mn in FY21.
CONSOLIDATED FINANCIAL SUMMARY OF BOAT
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COMPETITIVE ANALYSIS: MARKET PEERS
Boat, which commands the highest share in India's wearables market based on volume, and is vying to be a made-in-India global lifestyle brand, is all set to list its shares on the stock market. Let’s take a look at how other companies within this space are performing at the stock markets.
ONE OF THE LARGEST INDIAN DIGITAL-FIRST BRANDS WITH LEADING MARKET POSITIONS
As one of the largest Indian digital-first brands in terms of revenue from operations for the financial year 2021, Imagine Marketing Limited's focus on delivering high-quality, aspirational, lifestyle-focused products targeted at India's rapidly emerging online audience of young, digitally-enabled and trend-conscious consumers has led to its flagship brand "boat" becoming synonymous with the hearables and wearables markets in India (Source: RedSeer Report). For the quarter ending September 30, 2021, its brand "boat" was recognised as the #1 wireless hearables brand in value and volume terms and #2 smartwatch brand in India by volume with market shares of 48% and 23% in terms of volume, and 30% and 13% by value, in wireless hearables and smartwatches respectively (Source: RedSeer Report). For the six month period ended September 30, 2021, RedGear is one of the leading brands in the gaming headsets and controllers (keyboard, mouse, mouse pad, joystick) market based on sales volume on leading ecommerce marketplaces (Source: RedSeer Report).
ITS BRAND "BOAT" IS A CONSUMER BRAND WITH STRONG MARKET POSITIONING AND A CLEAR VALUE PROPOSITION
Since the launch of its flagship brand "boat" in 2014, Imagine Marketing Limited has consistently invested significant resources in enhancing the strength and appeal of the brand. The company has done so by focusing on building its awareness, enhancing the appeal of products sold under the brand, offering products at affordable price points with a clear value proposition, maintaining a high quality of products sold under the brand and building consumer engagement pre and post sales. It has adopted a lifestyle approach towards its brand positioning and have consequently introduced products with trendy designs, vibrant colours and practical features that are relevant to the Indian audience across various product categories so as to differentiate its products from those of its competitors. Furthermore, according to the RedSeer Report, the company's flagship brand “boAt” has (i) a higher top-of-mind awareness among its users, compared to top-of-mind awareness of other comparable brands (in hearables and wearables markets) among their respective users, and (ii) a higher unaided recall than other comparable brands (in hearables and wearables markets) among the respective non-users, which the company believes has contributed to the growth in its consumer base. For the third quarter of Financial Year 2022, as per Flipkart's brand awareness index, the flagship "boat" brand enjoyed the highest brand awareness score in the personal audio and wearables segments.
DIGITAL-FIRST PLATFORM CAPABILITIES ARE TARGETED TO ENABLE GROWTH AND TO BUILD A PRESENCE ACROSS MULTIPLE CONSUMER CATEGORIES
Imagine Marketing Limited has made significant investments in its platform and expect to continue to invest and leverage its digitalfirst capabilities as well as its strong consumer lifestyle brands to further build a portfolio of products across a wide range of attractive and high-growth consumer categories. The company believes that it is well-positioned to achieve this vision by leveraging the investments that it has made in its brands, its ability to understand and target India's large, digitally savvy consumer base, its strong research and development capabilities for new product development and product re-engineering, and itsstrong and growing supply channel relationships:
- Nuanced marketing capabilities to efficiently generate high levels of consumer engagement and sales. As a digitalfirst consumer products company, the company utilizes digital marketing to target consumers across the entire marketing funnel, from creating awareness and driving consideration to conversion by communicating what its brands stand to deliver.
- Ability to understand consumer behaviour and garner relevant category insights: The company is able to develop its product offerings based on feedback and insights received from its customers and sales channels on a real-time basis. The company benefits from this ear-to-ground approach as it is able to identify demand trends, product gaps in its offering, as well as potential improvements to its existing products, which it leverages towards further adapting its products and its portfolio to the preferences of its consumers.
- Strong platform capabilities across design, research and development, technology relationships and supply chain: boAt Labs’, the company’s in-house research and development team has been instrumental in customizing and designing its products specifically for the Indian consumer. The company believe that this differentiates its products from those of its competitors who may not have an established product development channel focused solely on India. Through 'boAt Labs' the company has developed its own proprietary technology stack in-house, which consists of IoT solution design, software and hardware design, cloud development, semi-conductor validation and embedded software design.
The company relies on a number of third-party suppliers for production of its products.
The company is reliant on its relationships with certain online marketplaces and offline distributors.
Pricing pressure from customers, online marketplaces or distributors may affect its gross margins.
STRATEGIES GOING FORWARD:
BUILD ON ITS MARKET LEADERSHIP POSITIONS IN ITS EXISTING CORE, FAST-GROWING CATEGORIES
According to the RedSeer Report, as on September 30, 2021, Imagine Marketing Limited flagship brand “boAt” has an established market leading position in India for wireless hearables and wearables. While its aim to develop leading positions across other product categories, the company believe that it can build upon its market leadership position in its existing categories through multiple levers and it plans to take advantage of the industry potential that it believes will drive growth in its hearables and wearables business. The company aims to grow its consumer base and attract new consumers through effective branding, targeted advertising and consumer engagement. The company plans to leverage its existing distributor relationships to penetrate the offline general trade segment to drive sales of its hearables and wearables into Tier 2+ cities and towns in India. Imagine Marketing Limited also intends to focus on covering a range of specific consumer segments, product sub-categories and price points which it believes will be effective in widening its appeal across larger cross sections of the Indian consumer population and potentially attract more consumers to these categories. The company also intend to grow the volume of its sales from other marketplaces and channels across the hearables and wearables product categories such as Nykaa, Tata Cliq and Myntra, and to increase the volume of its sales derived from its own website, www.boat-lifestyle.com.
EXPAND PRESENCE INTO OTHER ADJACENT PRODUCT CATEGORIES
Imagine Marketing Limited aims to grow its business through further investment towards its existing brands, and by way of acquisitions of other consumer product brands. The company also plans to drive organic growth by expanding into new product categories adjacent to its existing lines of business. It aims to expand its product offerings under its “boAt” brand, and evolve the brand further as a lifestyle brand with product offerings across an even wider range of lifestyle categories. The company believe this is a significant step towards increasing its wallet share with its existing consumers, as well as leveraging the high brand recall and awareness of its flagship “boAt” brand to acquire new consumers. Imagine Marketing Limited also plans to develop new brands that are relevant to the adjacent product categories that it intends to expand into. The company also actively seek to acquire or invest in companies that can help to accelerate its expansion to additional product categories that resonate with its customer base, enable it to appeal to a wider cross section of customers, or strengthen its product portfolio and leadership position in existing categories.
CONTINUE TO INVEST IN BUILDING ITS BRANDS INCLUDING ITS FLAGSHIP "BOAT"
Imagine Marketing Limited plans to continue to make further investments in developing its existing brands, so as to maintain a high social media recall and other positive association with its brands and to continue to attract new consumers to purchase its products. The company also plan to deepen its engagement with its users by focusing on the emerging sub-culture and subsegment trends through online and offline channels.
DIVERSIFYING ITS SUPPLIER AND CONTRACT MANUFACTURER NETWORK
Imagine Marketing Limited has taken significant steps to and plan to continue to diversify its supplier base and further increase the resilience of its supply chain by engaging new suppliers based in India and Vietnam, thereby increasing the share of its products that are manufactured in these countries. The company is also committed to developing and supporting the manufacturing ecosystem in India. In addition, the company entered into an agreement to establish a joint venture with Dixon Technologies in January 2022 for manufacturing and developing its Bluetooth-enabled hearables products.
INVESTING AHEAD OF THE CURVE IN ITS RESEARCH AND DEVELOPMENT CAPABILITIES
Imagine Marketing Limited intends to continue investing in its human capital in research and development and grow its 'boat Labs' team to develop specialist capabilities and know-how relating to affordable research and development. The company also intend to enter into further collaborations with technology companies in order to augment its product design and manufacturing capabilities, as it believes that enhanced technology can help it to differentiate product offerings and introduce new features and products ahead of its competitors
EXPAND INTO INTERNATIONAL MARKETS PRIMARILY WITHIN ITS CORE AUDIO AND WEARABLES CATEGORIES
Imagine Marketing Limited intends to expand its operations into international markets that have a large Indian diaspora with similar tastes and/or preferences as in India, such as the United Arab Emirates, Nepal and countries in the South East Asia region. As part of its overseas expansion, the company intends to leverage the established presence of its online sales channels as this will help the company ascertain its product-market fit in a capital-efficient manner, and guide possible subsequent investments in marketing and brand-building in these markets.
Disclaimer - The content on this page is made available on the basis of the DRHP (draft red herring prospectus ) filed by Imagine Marketing Limited. The final content could change based on the Red Herring Prospectus (RHP) filed