28 January 2026
Imagine Marketing, the parent of consumer electronics startup boAt, has disclosed several red flags raised by its statutory auditor, B S R & Co LLP, in its updated draft red herring prospectus ahead of its much-anticipated IPO. The auditors flagged a series of financial and regulatory compliance issues across the company and its subsidiaries over the past three financial years.
The auditors found that quarterly returns or statements filed with banks and financial institutions did not match the company’s own books of account between financial years 2023 and 2025. They also noted instances where funds raised on a short-term basis were used for long-term purposes at one subsidiary in FY23 and FY24, raising concerns about liquidity management and cash-flow practices.
The audit report further pointed to cash losses across multiple entities—BoAt in FY23 and FY24, its joint venture Califonix Tech and Manufacturing, its associate Kimirica Lifestyle, and subsidiaries Dive Marketing and HOB Ventures. Adding to the concerns, the auditors highlighted material uncertainty around the ability of two overseas subsidiaries—Singapore-based Kaha Pte and Imagine Marketing Singapore to meet their existing liabilities in FY23 and FY24.
According to the DRHP, the auditors also flagged non-compliance with certain requirements related to the mandatory audit-trail feature in accounting software. The company stated that it has since enabled this feature for subsidiaries Dive Marketing and HOB Ventures to meet regulatory norms.
Other observations included director remuneration exceeding legal thresholds under Section 197 of the Companies Act, arrears in undisputed statutory dues, the absence of daily data backups onIndianservers, and non-verification of plant, property, and equipment in FY23 due to a change in the verification policy.
BoAt said it has already taken several corrective measures, including obtaining a shareholder resolution to waive the excess director remuneration and ensuring that accurate numbers are reported from the current financial year to minimise discrepancies between its books and regulatory returns.
These disclosures come as BoAt prepares to raise Rs 1,500 crore from the public markets, comprising a fresh issue of equity shares worth Rs 500 crore and an offer for sale (OFS) of Rs 1,000 crore by existing shareholders. Private equity major South Lake Investment (Warburg Pincus), the company’s largest shareholder with a 39.35% stake, will offload shares worth Rs 500 crore—half of the total OFS.
Imagine Marketing, the parent of consumer electronics startup boAt, has disclosed several red flags raised by its statutory auditor, B S R & Co LLP, in its updated draft red herring prospectus ahead of its much-anticipated IPO. The auditors flagged a series of financial and regulatory compliance issues across the company and its subsidiaries over the past three financial years.
The auditors found that quarterly returns or statements filed with banks and financial institutions did not match the company’s own books of account between financial years 2023 and 2025. They also noted instances where funds raised on a short-term basis were used for long-term purposes at one subsidiary in FY23 and FY24, raising concerns about liquidity management and cash-flow practices.
The audit report further pointed to cash losses across multiple entities—BoAt in FY23 and FY24, its joint venture Califonix Tech and Manufacturing, its associate Kimirica Lifestyle, and subsidiaries Dive Marketing and HOB Ventures. Adding to the concerns, the auditors highlighted material uncertainty around the ability of two overseas subsidiaries—Singapore-based Kaha Pte and Imagine Marketing Singapore to meet their existing liabilities in FY23 and FY24.
According to the DRHP, the auditors also flagged non-compliance with certain requirements related to the mandatory audit-trail feature in accounting software. The company stated that it has since enabled this feature for subsidiaries Dive Marketing and HOB Ventures to meet regulatory norms.
Other observations included director remuneration exceeding legal thresholds under Section 197 of the Companies Act, arrears in undisputed statutory dues, the absence of daily data backups onIndianservers, and non-verification of plant, property, and equipment in FY23 due to a change in the verification policy.
BoAt said it has already taken several corrective measures, including obtaining a shareholder resolution to waive the excess director remuneration and ensuring that accurate numbers are reported from the current financial year to minimise discrepancies between its books and regulatory returns.
These disclosures come as BoAt prepares to raise Rs 1,500 crore from the public markets, comprising a fresh issue of equity shares worth Rs 500 crore and an offer for sale (OFS) of Rs 1,000 crore by existing shareholders. Private equity major South Lake Investment (Warburg Pincus), the company’s largest shareholder with a 39.35% stake, will offload shares worth Rs 500 crore—half of the total OFS.
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