IPO · Commerce & Consumer Brands

boAt auditors flag compliance issues before IPO

By Startup Enthusiast · 11 December 2025

What they do

BoAt sells consumer electronics including wireless earbuds, smartwatches, speakers, and home audio equipment

The company filed an updated DRHP for a ₹1,500 Cr IPO, revealing auditor concerns over financial reporting and internal controls

Auditors flagged mismatches between bank statements and internal books, alongside governance lapses like excess director remuneration

Statutory auditors BSR & Co LLP flagged multiple financial and governance issues in boAt's updated draft red herring prospectus.
The company plans to raise ₹1,500 Cr through an IPO, consisting of a ₹500 Cr fresh issue and a ₹1,000 Cr offer for sale.
Auditors identified discrepancies between quarterly statements submitted to lenders and the company's internal audited books for FY23, FY24, and FY25.
The report highlighted the use of short-term borrowings for long-term requirements at subsidiaries, violating standard financial discipline.
Governance concerns included excess remuneration paid to directors in FY23 and non-compliance with mandatory audit-trail requirements in accounting software.
The company reported a net profit of ₹61 Cr for FY25, marking a turnaround from the previous year's loss.

This is the company's second attempt to go public after withdrawing its previous 2022 IPO filing.
The IPO size has been reduced from the ₹2,000 Cr target originally planned in the earlier filing.
The company has recently undergone leadership changes, with co-founder Sameer Mehta moving to an executive director role and Gaurav Nayyar becoming CEO.

The company markets a wide range of audio products including true wireless earbuds, neckbands, and wireless headphones.
Its portfolio has expanded to include smartwatches, Bluetooth speakers, soundbars, and home entertainment devices like projectors.
It operates a direct-to-consumer model through its official website and app, offering features like product engraving.
The brand provides a 12-month standard warranty plus a 3-month extended warranty on products purchased through its own channels.
It targets the mass market with competitive pricing and frequent festive sales across its product categories.

The company intends to proceed with its public listing despite the auditor's observations.
Management claims to have reconciled financial information and implemented more compliant accounting systems.

Warburg Pincus (existing) — A private equity firm and the company's largest shareholder with a 39.35% stake.

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