Highlighting discrepancies in key financial records, the updated DRHP shows auditors raising concerns ahead of the BoAt IPO.
Imagine Marketing, the parent company of consumer electronics brand BoAt, has reported in its updated draft red herring prospectus that statutory auditors have raised concerns over mismatches between financial information submitted to lenders and the figures recorded in its own books.
The disclosures come as the Gurugram based company prepares for its second attempt at an initial public offering, through which it aims to raise ₹15 billion.
According to an audit report by BSR and Company LLP, the company’s quarterly returns filed with banks did not match its accounting records for fiscal years 2025, 2024, and 2023. Auditors also found that short term borrowings had been used to fund long term capital requirements of subsidiaries in FY 2024 and FY 2023.
The report pointed to material uncertainty around the ability of two subsidiaries, Kaha Pte Ltd and Imagine Marketing Singapore Pte Ltd, to meet their liabilities in FY 2023 and FY 2024. It noted excess managerial remuneration in FY 2023, arrears in undisputed statutory dues in FY 2023 and FY 2025, and failure by certain subsidiaries to maintain required electronic backups on India based servers. Physical verification of property, plant, and equipment was not conducted in FY 2023 due to a change in verification policy. The filing also called for disclosures under Rule 11 e regarding investments made through Imagine Marketing Singapore Pte Ltd into Kaha Pte Ltd during FY 2023 to FY 2025.
The company has taken some corrective steps, including obtaining shareholder approval for excess remuneration and improving reporting accuracy, though it cautioned that similar audit remarks may reappear. The IPO will include a fresh issue of ₹5 billion and an offer for sale of ₹10 billion by promoters and investors. ICICI Securities, Goldman Sachs India Securities, JM Financial, and Nomura Financial Advisory and Securities India are the book running lead managers, and MUFG Intime India is the registrar.
