Flipkart, the e-commerce company owned by Walmart, has completed the payout of eligible employee stock options (ESOPs) equivalent to their value in PhonePe. This action follows the separation of the two entities in December last year.
Flipkart Payout Details and Employee Benefits
Sources suggest that the payout exceeds $700 million. It is expected to benefit around 24,000 past and present employees. Although the platform has not disclosed the specific payout amount or the employees who will benefit. This sizable buyback makes it one of the largest in India. Although these figures have not been independently verified by Mint.
Flipkart Pricing and Background of the Stock Option
Flipkart Group CEO Kalyan Krishnamurthy emailed employees, pricing the stock option at $43.67 per share.
It had previously announced in December 2022 that it would make a one-time discretionary payout to employees following the separation of PhonePe from the platform. PhonePe’s buyback realigns its shareholding after raising $1.5 billion in capital from existing and new investors, including Walmart.
PhonePe’s Importance and Recent Investments
PhonePe, majority-owned by Walmart, is one of India’s largest digital payments platforms. PhonePe became an India-domiciled company as part of the separation process from Flipkart.
This year, General Atlantic invested over $1 billion in PhonePe, valuing the fintech firm at around $12 billion. In 2022, investors valued Flipkart at more than $40 billion.
The email sent to Flipkart employees on Friday explained, “The Board of Directors of Flipkart Private Limited announced the complete separation of the PhonePe business by selling off its entire shareholding in December 2022. With this development, the Board of Directors decided to pay $43.67 as compensation for each ESOP.” The payout covered vested options for eligible current and former stakeholders and unvested options only for eligible current stakeholders, as of the record date of December 23, 2022.
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