By Start Ups

Sameer Mehta, co-founder and CEO, BoAt

Consumer electronics company BoAt Lifestyle is making changes to its business as it plans to revisit its bid at public listing.

The company, which had put its listing plans on the backburner in October 2022, is looking to roll out its initial public offering (IPO) within 18 months, said a senior executive.

“We will get ready for an IPO. In my estimation, it is about 18 months away. We are working on all the internal parameters required to get us there,” Sameer Mehta, co-founder and chief executive officer (CEO), BoAt, told Business Standard.

As part of its business focus, BoAt is scaling down its wearables business to focus more on audio. The company expects just 12-13 per cent contribution from wearables to its overall revenue this year.

According to Mehta, the company has turned the corner on profitability and is now earnings before interest, taxes, depreciation and amortisation (Ebitda) positive.

It is moving away from entry-level products to higher price ranges in a bid to increase sales and revenue. This comes as consumer demand from premium devices is on the rise.

“In wearables, we have retrenched and are now re-looking at the entire strategy of how to approach the segment. We have cut down on our business plan in that space. We want to build categories that are more customer-centric rather than price-point centric,” Mehta said.

Instead, the market leader is looking to double down on its audio category, where it is seeing meaningful long-term returns. The company is looking to grow more than 15 per cent in this segment this year.

BoAt’s shift away from wearables comes at a time when growth has slowed down in the Indian wearables market.

According to the International Data Corporation (IDC), the market grew by just 2.1 per cent year-over-year (Y-o-Y) to 25.6 million units in the first quarter (Q1) of calendar year (CY) 2024. This was after growing by at least double digits consecutively since Q4 CY 2017.

Notably, the wearables segment currently makes up a small part of BoAt’s overall business. According to Mehta, around 75-80 per cent of the company’s revenue comes from audio products.


According to IDC data, in Q1 CY 2024, smartwatch shipments declined 7.3 per cent to 9.6 million units for the first time since Q4 CY 2018. On the other hand, the earwear category grew by 8.3 per cent during the quarter, shipping 15.9 million units. 

While demand for audio products remains robust, BoAt is looking to capitalise on the prevailing wave of “premiumisation” in the market.

The firm is witnessing increasing demand for higher-end devices.

To cater to this growing demand, the company recently launched Nirvana by BoAt, in collaboration with Ranveer Singh. The brand, Mehta says, is doing more than Rs 300 crore in annual revenue run rate (ARR) within six months of launch.

“Our aim is to increase our audio average selling price (ASP) by over 25 per cent this year,” he added.

Profitability and local push

The renewed focus on higher ASP devices, coupled with a push towards domestic manufacturing, has allowed BoAt to turn the corner on profitability.

Image Marketing, the parent company of BoAt, posted its best-ever revenue of Rs 3,377 crore during the financial year ended March 2023.

However, the company, which had been profitable for eight years since inception, posted a loss of Rs 129.4 crore in FY23. This was owing to growing business development and advertising costs.

It had reported revenue from operations of Rs 2,873 crore and a profit of Rs 68.70 crore in FY22.

“Last year, we lost money. This year, we are Ebitda positive,” Mehta said, adding that domestic manufacturing has played a pivotal role in the company’s turnaround.

BoAt is currently manufacturing as many as 75 per cent of its products in India. The remaining is sourced from countries like Vietnam, Thailand and China.

“Last year, we started manufacturing in India but couldn’t get it right. Delays in shipments, and other such reasons, caused us to lose money. In the past year, we have learnt how to do it the right way. Our joint venture with Dixon Technologies started last year. This has helped us turn the corner on profitability,” Mehta added.

However, it will be a while before the company shifts its entire supply chain to India.

“The kind of skills available, and the capital investment required to manufacture certain products is very high compared to the overall volumes. Hence, it does not make sense to shift manufacturing to India at this moment,” Mehta said.

On fundraise, Mehta said the firm is well capitalised. BoAt has secured up to $170 million in funding till date, and is backed by notable investors such as Warburg Pincus and Qualcomm Ventures.

First Published: Jun 05 2024 | 9:00 PM IST

Source: Start Ups