boAt’s renewed ₹1,500-crore IPO push comes amid fresh audit findings, highlighting gaps in the firm's internal controls.
Auditors found mismatches between financial data submitted to lenders and the company’s own books for FY23, FY24 and FY25.
Company said it has started addressing these issues by correcting financial statements and upgrading accounting systems.
As boAt's parent company, Imagine Marketing, gears up for its second attempt at going public, fresh audits have cast a spotlight on the company’s internal controls and financial discipline.
According to its October's draft red herring prospectus (DRHP), its statutory auditors BSR & Co LLP found inconsistencies between financial information submitted to lenders and the company's own books across FY23, FY24 and FY25. These findings emerged just as the Gurugram-based wearables and audio brand works to revive its stalled IPO ambitions.
1 December 2025
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The audit noted that quarterly statements shared with banks did not match the company's internal records. It also flagged cases where short-term borrowings were diverted for long-term needs of subsidiaries, an early sign of financial-control gaps within the group.
Two overseas subsidiaries, Kaha Pte Ltd and Imagine Marketing Singapore Pte Ltd, raised further concern, with auditors warning of “material uncertainty” over their ability to meet liabilities in FY23 and FY24.
Other lapses included arrears on statutory dues, non-compliance with mandatory audit-trail rules, inadequate backups of accounting data, and improper physical verification of plant and equipment.
Auditors also pointed to excess remuneration paid to directors in FY23, which was later regularised through shareholder approval.
In its response, boAt said it has already begun addressing several of these issues, correcting financial submissions, upgrading accounting systems, and securing the required approvals.
“Our company took steps to rectify some of the observations which included obtaining a waiver, through shareholders’ resolution for the excess remuneration paid to directors of our company and ensuring that accurate numbers are reported from the current financial year to minimise the differences between the books and returns," the firm said.
However, auditors cautioned that they cannot guarantee that similar lapses won’t recur, underscoring the need for stronger internal processes.
Financial Recovery before Listing
These disclosures come as boAt readies a ₹1,500 crore public issue, comprising a ₹500 crore fresh issue and a ₹1,000 crore offer for sale by founders Aman Gupta and Sameer Mehta, along with early investors including Warburg Pincus, Fireside Ventures and Qualcomm Ventures.
Point to note: This issue size is smaller than the company’s earlier plan to raise ₹2,000 crore.
The IPO filing also sheds light on the environment in which boAt is heading to the markets. After two consecutive years of losses, the company has returned to profitability.
In Q1 of the current fiscal year, it reported revenue of ₹628 crore, up 11% year-on-year (YoY), and a net profit of ₹21 crore, an improvement from the ₹31 crore loss a year earlier.
For FY25, boAt posted a profit exceeding ₹60 crore compared to an ₹80 crore loss in FY24, crediting product innovation and tighter cost controls. Consolidated revenue, however, dipped slightly to ₹3,098 crore from ₹3,122 crore.
The company’s comeback coincides with a cooling wearables market in India. boAt’s core segment where rising competition and pricing pressure have challenged growth across audio accessories and smartwatches.
As investors weigh the upcoming IPO, boAt’s strong brand presence and scale will likely be assessed alongside the audit findings, offering a more complete picture of the company’s governance maturity and operational readiness.
