Questions are being raised about the internal situation of boAt before its IPO. According to reports, the company's employee attrition rate has reached 34%, and founders Aman Gupta and Sameer Mehta have stepped down from their positions even before the DRHP filing.
boAt IPO Update: India's leading audio and wearables brand boAt appears to be embroiled in difficulties even before its IPO. According to market expert Jayant Mundhra, several red flags are visible in the company's Updated Draft Red Herring Prospectus (UDRHP). A 34% employee attrition rate and the failure to retain employees despite the ESOP policy have heightened investor concerns, especially as top founders Aman Gupta and Sameer Mehta resigned from their positions before the DRHP filing.
Founders' Sudden Move Just Before IPO Filing
Both co-founders of boAt, Aman Gupta and Sameer Ashok Mehta, resigned from their executive positions just 29 days before the IPO filing. According to the company's DRHP, Mehta stepped down as Chief Executive Officer (CEO) and Gupta as Chief Marketing Officer (CMO). This decision came at a time when the company was preparing for its much-anticipated public offering.
Market analysts believe that such a significant change occurring just before an IPO is a major signal for investors. When top leaders of a company suddenly step back, it can create uncertainty regarding its operational stability and strategic direction.
New Board-Level Roles, But Without Salary
According to the DRHP, both founders will now remain in board-level positions within the company. Sameer Mehta has been appointed Executive Director and Aman Gupta as Non-Executive Director. Notably, neither will now receive any salary or “sitting fees.” In FY25, their annual salaries were approximately ₹2.5 crore, which has now been completely terminated.
Financial experts suggest that this move could be a “strategic pre-IPO move,” through which the founders are trying to stabilize the company's public image by distancing themselves from operational responsibilities. However, this change is also raising questions among investors regarding trust.
Distancing from Operational Responsibilities or Strategic Preparation?
Market commentator Jayant Mundhra has described this change as a “calculated pre-IPO pivot.” According to him, the founders' detachment from operational control indicates a strategic distancing rather than a planned succession. This suggests that boAt is reorganizing its management structure before the IPO to convey a message of stability and transparency to investors.
On the other hand, some experts believe that such decisions taken at this time could send a wrong signal to the market. Changes at the top level of management before an IPO are often viewed as a “confidence risk,” making retail and institutional investors cautious.
Increasing Employee Instability, No Relief from ESOPs Either
Rising employee attrition within the company is also a cause for concern. The DRHP revealed that boAt's employee churn rate has reached 34%. Despite a substantial ESOP policy, the company has failed to retain talent. This indicates that the company's internal situation may be unstable before the IPO.
Industry analysts state that when founders step back and employees rapidly leave the company, it can erode investor confidence. In such a scenario, boAt will need to focus not only on its financial performance but also on its human capital strategy before the IPO.
Investors Now Eyeing Company Transparency
boAt's IPO is considered highly anticipated in the Indian market, but recent developments have raised doubts among investors. Experts believe that the company must now demonstrate clarity on its corporate governance and leadership structure.
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