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boAt auditors flag discrepancies and compliance gaps across FY23 to FY25

EntrackrEntrackr · 15d ago
boAt auditors flag discrepancies and compliance gaps across FY23 to FY25
Medial

Consumer electronics brand boAt has disclosed a series of financial reporting and compliance lapses in its updated draft red herring prospectus (DRHP). The statutory auditors of Imagine Marketing, the parent entity of boAt, issued several unfavourable remarks relating to mismatches in statements, fund utilisation, governance, and internal controls across FY23 to FY25. According to the filing, quarterly returns and statements submitted to banks were not in agreement with the company’s books of accounts for FY23, FY24, and FY25. The auditors also noted instances of short-term borrowings being used for long-term purposes in FY23 and FY24, in violation of standard financial discipline. Governance lapses were also highlighted in the DRHP. The company paid excess remuneration to directors in FY23, breaching limits prescribed under Section 197 of the Companies Act. Auditors flagged arrears of undisputed statutory dues in FY23 and FY25, along with non-maintenance of electronic backups of books of account by two subsidiaries for FY23. Additionally, boAt did not conduct physical verification of plant, property, and equipment for FY23 due to a change in its verification policy. boAt said it has taken corrective steps, including filing revised statements and obtaining shareholder approval for the excess remuneration. In October, the company refiled its updated DRHP with SEBI, reducing its IPO size to Rs 1,500 crore. The IPO includes an issue of equity shares worth Rs 500 crore, while existing shareholders and co-founders will offload shares worth Rs 1,000 crore through an offer for sale (OFS). For the fiscal year ended March 2025, boAt reported Rs 3,073 crore in operating revenue and a net profit of Rs 61 crore, turning around from a loss of Rs 79.6 crore in FY24. In the first quarter of FY26, the company reported operating revenue of Rs 628 crore and a net profit of Rs 21.35 crore.

boAt files draft red herring prospectus via confidential route

EntrackrEntrackr · 8m ago
boAt files draft red herring prospectus via confidential route
Medial

boAt files draft red herring prospectus via confidential route Consumer electronics brand boAt has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) through the confidential filing route. The pre-filing mechanism, introduced in 2022, allows companies to submit their DRHP exclusively to SEBI, keeping the document confidential until they finalize their IPO plans. The initiative aims to provide greater flexibility and privacy to firms preparing for a public listing. Founded by Aman Gupta and Sameer Mehta, boAt focuses on affordable, stylish, and high-quality audio products, wearables, and accessories. The brand drives sales through online marketplaces like Amazon and Flipkart, its own website, and maintains a strong offline presence across retail stores. boAt has raised over $170 million to date, including a $60 million round led by Warburg Pincus and Malabar Investments in 2023. According to startup data intelligence platform TheKredible, Warburg Pincus is the largest external stakeholder, followed by Fireside Ventures and Qualcomm. During the fiscal year ended March 2024, boAt’s scale reduced by 5% to Rs 3,122 crore, compared to Rs 3,285 crore in FY23. However, the company managed to cut its losses by 47% to Rs 53.5 crore during the same period. India’s wearable market declined 20.7% year-on-year to 38 million units in Q3 2024, marking a second consecutive quarterly drop, according to IDC. The decline was driven by fewer product launches and cautious inventory management, despite the festive season. Notably, the average selling price rose by 1.3% to $21.3—the first increase since Q2 2019.

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