ESOP holders will receive $700 million from Flipkart

• ByStartupStory     |    December 24, 2022

As part of its separation from digital payment upstart PhonePe, Walmart-owned e-commerce behemoth Flipkart will pay employee stock option holders cash payouts totaling approximately $700 million at a time when the company is trying to recruit and retain talent.

“We are pleased to announce that employees, who are holders of Flipkart ESOPs (employee stock option plan), will receive a one-time discretionary cash payout as part of the transaction. This payout represents the value of the PhonePe holding within those Flipkart options,” said Kalyan Krishnamurthy, Flipkart’s CEO in an internal email.

Kalyan claims that the payoff will be $43.67 per option, reflecting the current market price of PhonePe. “The new share price of Flipkart has been determined at $165.83 per option (previously $189.1), excluding the value of PhonePe,” he said.

Employees who would qualify for the repurchase will soon receive a report and additional information regarding the payout. Uncertainty surrounds the number of workers who would get the reimbursement, a source told Moneycontrol.

More recently, as PhonePe prepared for an IPO, the two companies confirmed their complete ownership separation. Prior to PhonePe’s anticipated multimillion-dollar fundraising effort, which would be its biggest, the announcement was made.

To assist the platform obtain focused, long-term financing to fund its expansion aspirations, Flipkart announced a partial spin-off of PhonePe. At the same time, in December 2020, PhonePe raised $700 million from investors including Walmart at a valuation of $5.5 billion.

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