BoAt Attrition Hits 34% Ahead of Downsized ₹1,500 Cr IPO
As consumer electronics giant Imagine Marketing, the parent company of the popular audio and wearables brand BoAt, cruises toward its highly anticipated Initial Public Offering (IPO), the internal stability of the organization is facing intense scrutiny.
The company’s updated Draft Red Herring Prospectus (UDRHP), filed with the market regulator, has revealed a sharply rising employee attrition rate, which has been flagged by market commentators as a significant red flag for potential investors.
For the financial year ended March 31, 2025 (FY25), BoAt’s full-time employee attrition rate surged to an alarming 34.18%.
This marks a steady and concerning climb from the previous years, which saw attrition rates of 28.14% in FY24 and 27.09% in FY23.
The actual number of employee departures has grown consistently, with 161 employees exiting in FY25, following 132 in FY24, and 107 in FY23.
The exodus shows no immediate signs of slowing down, with the company reporting that 31 employees left in the first three months of the current fiscal year (Q1 FY26) alone.
Citing these figures, market commentators described the situation as far beyond normal turnover, labeling it a “mass exodus.”
They also suggested that the company completely broke its internal culture.
A key concern raised is the apparent failure of BoAt’s generous Employee Stock Option (ESOP) pool to retain talent, implying that employees may be “miserable despite paper wealth” or, more critically, “have no faith in the future value of the company’s stock” post-listing.
In its regulatory filings, the company acknowledged the risk, stating that competition for “senior management and other key personnel with technical and industry expertise” is intense.
The firm explicitly warned that any difficulties in retaining skilled talent could negatively impact its growth and competitiveness.
Pre-IPO Leadership Pivot Raises Eyebrows
A major shake-up at the leadership level just weeks before the UDRHP was filed and it compounds the company’s talent concerns.
Co-founder and former CEO Sameer Mehta transitioned to the role of Executive Director, while Co-founder and former CMO Aman Gupta moved to a Non-Executive Director position on the board.
In a planned transition, the company elevated Chief Operating Officer Gaurav Nayyar to the role of Chief Executive Officer.
While the company positions this as a strategic leadership transition, the timing has attracted skepticism.
Both co-founders stepped down from their executive, salaried positions—a significant change, considering each reportedly drew a salary of ₹2.5 crore in FY25.
Analysts suggest the move is a “calculated pre-IPO pivot,” signaling the founders’ decision to distance themselves from day-to-day operational responsibilities right before the public listing.
BoAt Financial Turnaround Amidst Reduced IPO Size
The human capital challenges come even as BoAt successfully engineered a financial turnaround.
The company posted a net profit of over ₹60 crore in FY25, reversing a significant net loss of ₹80 crore reported in the preceding year, primarily driven by cost control and product innovation.
Furthermore, the company reported a net profit of ₹21 crore in Q1 FY26, against a net loss of ₹31 crore in the corresponding period last year, with operating revenue rising 11% year-on-year to ₹628 crore.
Despite the return to profitability, BoAt has trimmed its public issue size by a quarter, reducing the target from an initial ₹2,000 crore to ₹1,500 crore.
The revised IPO plan consists of a fresh issue of ₹500 crore and an Offer for Sale (OFS) of ₹1,000 crore by existing investors.
For prospective investors, the combination of soaring attrition, the abrupt leadership reshuffle, and the scaled-back IPO size presents a “parade of glaring red flags,” forcing a deeper evaluation of the underlying cultural health and long-term talent continuity of the successful D2C brand.
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