BoAt’s parent company, Imagine Marketing, has disclosed in its updated Draft Red Herring Prospectus (DRHP) that the statutory auditors have flagged concerns over discrepancies in the company’s submission to the lenders and information and figures reflected in its books.
Imagine Marketing’s statutory auditors, BSR & Co LLP, stated that the financial information provided by the company to the banks does not match that in its FY23, FY24 and FY25 books.
What are key concerns
The auditors said that the short-term borrowings by Imagine Marketing were used for the long-term capital needs of the company’s subsidiary entities for FY23 and FY24.
The audit report further highlighted material uncertainty around the ability of Kaha Pte and Imagine Marketing Singapore Pte, subsidiary companies, to meet their liabilities in fiscal years 2024 and 2023.
The auditors further highlighted arrears in undisputed statutory dues in fiscal 2023 and 2025, breach of managerial remuneration limitations prescribed under Section 197 of the Companies Act by the company in FY23.
The statutory auditors added that during fiscal year 2023, the physical verification of property, plant and equipment of the company was not carried out due to changes in the verification policy.
BoAt IPO plans
BoAT parent company Imagine Marketing is preparing a 1,500-crore initial public offer, and the disclosures are part of the company’s updated DRHP. The company is looking to raise Rs 500 crore via a fresh issue. Further, the company’s founders, Aman Gupta and Sameer Mehta, and early investors such as Warburg Pincus, Fireside Ventures, and Qualcomm Ventures are offloading a stake worth Rs 1,000 crore in an offer for sale.