Aman Gupta has repeatedly used boAt’s ESOP story to illustrate how wealth creation in startups doesn’t have to be restricted to founders. In older interviews and recent clips, he has said that several of boAt’s earliest team members became “crorepatis” purely through stock options as the company’s valuation compounded over the past decade. His broader point is that if founders are serious about building a durable company, they must “over‑value” key people, share upside via ESOPs, and then showcase those internal success stories so that employees see equity as real, not theoretical.
How boAt’s ESOPs are structured
boAt (Imagine Marketing) has built one of the larger ESOP pools among Indian D2C brands. Its updated DRHP notes:
- A sizeable employee stock option scheme covering senior leadership and critical mid‑level talent, with grants vesting over multiple years and linked to performance and retention.
- ESOPs are granted at a pre‑agreed exercise price and typically vest 25% each year after a one‑year cliff, giving employees a path to meaningful ownership if they stay and execute well.
In earlier conversations, Gupta has said boAt allows some flexibility between higher fixed salaries and more ESOPs, because many employees—scarred by other startup IPOs that destroyed value—are now cautious about equity heavy compensation. His line has been that ESOPs only work if:
- the company actually grows in value,
- employees can get liquidity (via buybacks or a credible IPO), and
- the culture treats ESOP holders as partners, not just staff.
Despite this, recent analyses of boAt’s IPO documents argue that the large ESOP pool has not prevented talent churn. A widely shared breakdown of the DRHP points out that employee attrition has climbed to about 34%, leading one commentator to say that either employees are “miserable despite paper wealth” or they “don’t believe in the future value of the stock”. That tension—ESOP richness on paper vs actual retention—is now one of the red flags investors are watching.
Financial trajectory and IPO details
Imagine Marketing, boAt’s parent, has filed an updated DRHP with SEBI in October 2025, trimming its IPO size to ₹1,500 crore from an earlier ₹2,000‑crore plan. The latest structure proposes:
- Fresh issue: ₹500 crore.
- Offer for sale (OFS): ₹1,000 crore by existing shareholders, including Warburg Pincus and other backers.
Use of proceeds is now tilted toward growth rather than just deleveraging:
- ₹225 crore for working capital,
- ₹150 crore for brand and marketing,
- balance for general corporate purposes.
On the financial side, boAt has gone through a rough but improving patch:
- FY24: Revenue fell about 5% YoY as the wearables market cooled and average selling prices crashed, but net loss nearly halved thanks to cost cuts and lower ad spend.
- Margins: Gross margin improved from 22.6% in FY23 to 29.2% in FY25 as the company localised manufacturing and optimised logistics, while EBITDA margin rose from 2.7% to 4.64% over the same period.
- FY25: The company has reportedly returned to profit with ~₹60 crore PAT after two loss‑making years, supported by better supply‑chain discipline, warranty cost optimisation and tighter marketing spends.
- Cash flows: Operating cash flow swung from a negative ₹18.1 crore in FY23 to a positive ₹441.5 crore in FY25, displaying improved working capital management.
Together, these trends let boAt pitch itself as a scaled, profitable consumer‑tech brand entering IPO with improving fundamentals rather than peak‑loss euphoria.
The red flags analysts are worried about
Even as boAt leans on stories of ESOP millionaires and a turnaround to sell its IPO, market analysts and governance watchers have flagged several concerns that now dominate the discussion around the issue:
For ESOP‑holders in particular, these red flags matter because the value of their options depends not just on topline growth but on governance quality, leadership depth and market confidence. A powerful story about early employees turning millionaires can coexist with present‑day unease if the current cohort doesn’t feel equally aligned with the company’s trajectory.
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