Imagine Marketing Limited IPO

01At a glance

What the company does — sells consumer electronics under the boAt brand, launched in 2015: earphones and speakers, smartwatches and rings, and chargers, cables and power banks, made largely by contract manufacturers (DRHP p.19, DRHP p.38).

Who pays it — young, price-conscious buyers, reached mostly through online marketplaces; online channels were 70.55% of FY25 product revenue, and the top two marketplaces alone 55% of revenue (DRHP p.35, DRHP p.141, our arithmetic).

Why it is raising money — ₹2,250 million for working capital, ₹1,500 million for brand and marketing, and the rest for general purposes (DRHP p.20).

How fast it has grown — it has shrunk: revenue was ₹33,768 million in FY23, ₹31,177 million in FY24 and ₹30,733 million in FY25; the June 2025 quarter was up 10.7% on a year earlier (DRHP p.21, our arithmetic).

The one thing to understand — the turnaround is in audio, not wearables. Wearables revenue fell from ₹9,016 million in FY23 to ₹3,304 million in FY25, while audio grew; profit returned in FY25, at an EBITDA margin of 4.64% (DRHP p.51, DRHP p.142).

02The business, in plain words

A consumer-electronics brand designs products, has them made by factories it does not own, and spends heavily on marketing to move them at low prices through online marketplaces and shops. It earns the gap between factory cost and the price it gets, minus marketing, marketplace fees, returns and warranties.

A young buyer wants wireless earbuds or a smartwatch at a low price → finds boAt on a marketplace or in a shop → contract manufacturers in India and abroad make the product to boAt's design → boAt ships it through the marketplace or a distributor and earns the margin.

A joint venture with Dixon Technologies, Califonix Tech and Manufacturing, made 37.46% of the units sold in the June 2025 quarter (DRHP p.45). The company still buys some finished goods from suppliers in China, Vietnam and Hong Kong, though it says this has fallen as production moved to India (DRHP p.39). It relies entirely on third-party logistics (DRHP p.50).

Earnings equation: Profit ≈ units sold × (price − cost) − marketing − channel fees − returns. In FY25 EBITDA was ₹1,425 million on ₹30,733 million of revenue (DRHP p.142).

03Where the money comes from

Source: DRHP p.142.

Audio was 69.93% of product revenue in FY23 and 84.23% in FY25 (DRHP p.142). In the June 2025 quarter wearables grew 15.93% on a year earlier, after two years of decline (DRHP p.51).

Source: DRHP p.35, DRHP p.141.

04The growth record

Source: DRHP p.21, DRHP p.142.

In the June 2025 quarter revenue was ₹6,281.02 million, EBITDA ₹415.84 million and profit ₹213.53 million, against ₹5,672.21 million, a negative ₹208.57 million and a loss of ₹310.76 million a year earlier (DRHP p.21, DRHP p.142).

05What the growth is made of

Revenue fell 9% from FY23 to FY25, all of it from wearables, which lost ₹5,711 million; audio added ₹2,352 million (DRHP p.142, our arithmetic). The profit swing of ₹1,905 million over the same two years came from margins, not sales. The audio segment's result was ₹1,714.60 million in FY25, down from ₹2,287.40 million in FY24, so the improvement lies in costs outside that segment result, which the document does not break down in the pages read (DRHP p.142).

The quarter to June 2025 is the first period in the filing with revenue growth: 10.7% on a year earlier, including wearables up 15.93% (DRHP p.21, DRHP p.51).

06Earnings quality

Margins are thin. EBITDA margin was 4.64% in FY25 and 6.62% in the June 2025 quarter (DRHP p.142). Pricing pressure from marketplaces and distributors, returns and warranty claims all bear on it (DRHP p.42, DRHP p.46).

Operating cash flow was negative in the June 2025 quarter and in some of the years reported, the document says (DRHP p.46). The balance sheet carries significant goodwill (DRHP p.54). The auditors' reports include matters under the Companies (Auditor's Report) Order, and the examination report on the restated information contains observations (DRHP p.41, DRHP p.49).

07The balance sheet

Source: DRHP p.21.

Borrowings fell by more than half over two years (DRHP p.21). Working capital needs are large, and the company makes prepayments to some suppliers and contract manufacturers (DRHP p.37, DRHP p.53).

08What the money is for

Source: DRHP p.20.

A pre-IPO placement of up to ₹1,000 million may reduce the fresh issue (DRHP p.20).

09Who is selling

Source: DRHP p.20.

All five are selling shareholders; together they are offering ₹10,000 million of shares, with the split to be set later (DRHP p.19, DRHP p.20).

10Promoters

The promoters are the co-founders Aman Gupta and Sameer Ashok Mehta, and South Lake Investment Ltd (DRHP p.19). South Lake holds much of its stake through preference shares that convert into equity before the red herring prospectus (DRHP p.20). Promoter-group members hold no shares (DRHP p.21).

11Who already owns it

Promoters hold 88.86% on a fully diluted basis, and the two investor sellers 5.56% (DRHP p.20). There are 7,185,060 outstanding preference shares, which convert into up to 53,952,251 equity shares before the red herring prospectus (DRHP p.19, DRHP p.20).

12What changed just before the IPO

• Return to profit — FY25 was the first profitable year in the filing (DRHP p.21).
• Debt reduction — borrowings fell from ₹12,361 million to ₹5,649 million over two years (DRHP p.21).
• Manufacturing in India — the Dixon joint venture made 37.46% of units in the June 2025 quarter (DRHP p.45).

13Capacity and expansion

The company owns no factory. Its main in-house capacity is the Califonix joint venture with Dixon, formed in January 2022 to make audio products (DRHP p.45); the rest comes from contract manufacturers and suppliers (DRHP p.38). The planned spending — ₹2,250 million of working capital and ₹1,500 million of marketing — is for growing sales, not for building capacity (DRHP p.20).

14Market size and industry structure

The Redseer report cited in the offer document puts the Indian consumer-devices market — audio, wearables, charging and similar products, excluding phones and large appliances — at ₹1,115 billion in FY25, and forecasts ₹1,782–2,038 billion by FY30 (DRHP p.19). Those forecasts are Redseer's, and newboard has not tested them. The document describes competition from large established companies as well as small organised and unorganised ones (DRHP p.55).

15Competitive position

What the document claims, and what it rests on:

• A strong brand among young buyers, with the boAt and Nirvana names, built with cricketers, musicians and influencers (DRHP p.50, DRHP p.57).
• Wide reach through marketplaces, its own website and offline retail (DRHP p.19).
• Local manufacturing through the Dixon joint venture (DRHP p.45).

Against that: revenue has fallen for two years, the smartwatch category has collapsed, and two marketplaces carry over half of sales (DRHP p.35, DRHP p.51).

16Peers the company named

None. The document states there are no listed companies in India or abroad with a similar business, so it gives no industry comparison (DRHP p.141). For the company it gives FY25 earnings per share of ₹4.07 basic and ₹4.05 diluted, net asset value per share of ₹28.78 at March 2025 and return on net worth of 14.14% (DRHP p.21, DRHP p.141). No P/E is possible until a price band is set.

17Risks, in plain words

• Two marketplaces. The top two carry over half of revenue, and their fee structures and payment terms set boAt's economics (DRHP p.35).
• Falling revenue. Revenue fell in FY24 and FY25 (DRHP p.36).
• Audio concentration. Audio was 84% of FY25 product revenue (DRHP p.43).
• Wearables. Revenue in the category fell by almost two thirds in two years (DRHP p.51).
• Suppliers and imports. Contract manufacturers and overseas suppliers, foreign-currency purchases and a single joint-venture plant (DRHP p.38, DRHP p.39, DRHP p.40, DRHP p.45).
• Returns and warranties. Product recalls, returns and warranty claims could be costly (DRHP p.46).
• Past non-compliance. The document reports instances of non-compliance with the Companies Act in the past (DRHP p.48).

18Litigation and regulatory matters

Source: DRHP p.22. Amounts are to the extent the document could quantify them.

Nothing is pending against the promoters (DRHP p.22).

19Related-party transactions

The document lists past and continuing related-party transactions as a risk (DRHP p.42). The largest related arrangement in the pages read is the Califonix joint venture with Dixon, which manufactures for the company (DRHP p.45).

20What the offer document does not say

In the sections read for this study, the document does not give:

• Where the FY25 cost savings came from, line by line.
• Why wearables revenue fell by two thirds, beyond the risk disclosure.
• The terms with the two main marketplaces, which it does not name in the pages read.
• Figures after June 2025, as this filing predates the March 2026 accounts.
• The price band, lot size or issue dates, which is normal at this stage.

21Five questions for management

1. Of the ₹1,905 million improvement in profit from FY23 to FY25, how much came from marketing, from interest and from product cost?
2. What is the strategy for wearables after a two-thirds fall in revenue?
3. What share of revenue do the two largest marketplaces take in fees, and how has it changed?
4. What share of products is now made in India, and what does the Dixon joint venture cost per unit against imports?
5. Why is working capital the largest use of the proceeds when borrowings have already been cut by half?

1Sources and cited facts

This study was read from 1 document the company filed. The 36 figures it cites are listed under the document each came from, with the page and the sentence as printed.