In a surprising blow to the consumer tech sector, Imagine Marketing, the parent company of the audio and wearables brand boAt, has reportedly deferred its IPO for the second time
The decision comes despite the company receiving SEBI’s observation letter in late 2025. Sources indicate that boAt is pausing the ₹1,500–₹2,000 crore public issue to reassess market conditions and address critical internal governance and financial concerns highlighted by its auditors.
1. The Deferral: Why Now?
Despite securing a “green light” from SEBI in September 2025 via the confidential pre-filing route, the company has chosen not to announce a price band. The pause is attributed to a “perfect storm” of internal and external pressures:
- Auditor Red Flags: Statutory auditor BSR & Co LLP flagged systemic record-keeping lapses and mismatches between internal books and financial statements submitted to lenders for fiscal years 2023, 2024, and 2025.
- Governance Gaps: Concerns were raised regarding the diversion of short-term borrowings for long-term projects and director remuneration exceeding statutory limits.
- Market Review: Amidst a volatile start to 2026, the company is reassessing whether public investors will accept a valuation that reflects its shift from “high-growth startup” to “profitable but slowing incumbent.”
2. Financial Performance: Profit Over Growth?
boAt achieved a notable financial turnaround in FY25, swinging to a ₹60–₹64 crore profit after two years of heavy losses (₹129.5 crore loss in FY23). However, the quality of this recovery is being questioned:
- Stagnant Revenue: FY25 revenue stood at ₹3,097.8 crore, nearly flat compared to the previous year, suggesting that profitability was driven by cost-cutting rather than market expansion.
- Wearables Slump: While audio remains a “cash cow” (84% of revenue), the wearables (smartwatch) segment saw revenue slump by 40% in FY25, following a similar decline in FY24.
- Inventory Issues: Elevated inventory levels and fierce price competition from rivals like Noise and Fire-Boltt have put pressure on sustainable margins.
3. Leadership Transition: The “Founder Exit” Concern
A major point of investor hesitation is the shifting roles of boAt’s high-profile founders.
- Aman Gupta & Sameer Mehta: In late 2025, the co-founders stepped down from their executive roles (CMO and CEO respectively) to move into non-executive and executive director positions without salary.
- Governance Perception: While common during an IPO transition to “professionalize” management, the timing—coupled with auditor observations—has raised questions about leadership continuity and long-term execution strategy.
4. Strategic Timeline: A History of Delays
This is the second major postponement for the brand, which first filed for a ₹2,000 crore IPO in January 2022.
| Event | Date | Action |
| First Filing | January 2022 | Filed for ₹2,000 crore; shelved due to market correction. |
| Revival | April 2025 | Revived plans via SEBI’s confidential route. |
| Approval | Sept 2025 | Received SEBI observation letter. |
| Second Deferral | Jan 2026 | IPO put on hold to “reassess internal readiness.” |
Conclusion: A “Ship” Waiting for Calmer Waters
The 2026 deferral signals that the Indian IPO market is no longer rewarding brand hype alone. For boAt to successfully list, it must demonstrate that its profitability is sustainable and that its internal financial controls are beyond reproach. Until then, its private equity backers—including Warburg Pincus and Qualcomm Ventures—will likely have to wait for a more favorable climate.
