Get All Access for $5/mo

Flipkart To Payout $700 Million To Esop Holders After PhonePe Split: Report As per the report, the payouts for the ESOP buyback will be made by July 31 and the communication regarding the same was made to the employees previously

By Teena Jose

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Twitter

Employees of ecommerce platform Flipkart are set to receive a cumulative payout of $700 million employee stock option plan (ESOP) buyback. According to an ET report, Flipkart is facilitating the buyback as part of its separation from the fintech giant PhonePe later this month, adding that the payouts for the ESOP buyback will be made by July 31 and the communication regarding the same was made to the employees previously.

The report further added that Flipkart will be offering current and former employees a one-time payout to account for PhonePe's value in Flipkart's shares. More than 24,000 former and current employees at Flipkart and Myntra stand to benefit from this.

In an email sent to its employees, Flipkart said the payout will be $43.67 per vested option. For current employees at Flipkart, the payout will take into account the total number of vested and unvested granted options. The compensation is expected to be paid out on or before July 31, according to media reports.

Further, current employees will also get benefits based on their unvested options, the internal note reportedly said.

To be sure, the payouts to each employee will still be subject to applicable withholding taxes and other tax rules in the respective countries of ESOP holders. According to the note cited by ET, added that legal formalities for the payout are currently underway.

Reportedly, the ESOP buyback will see Flipkart's valuation drop to $33 billion from the $37.6 billion it commanded during its last funding round in 2021. The company was valued at $12 billion as of February 2023, according to market research and data platform Tracxn.

Flipkart acquired payments company PhonePe in 2016 for $20 million. During th time of seperation from PhoePe, Flipkart had said in a statement that "The board has taken the decision to allow PhonePe to access dedicated capital to fund its long-term ambitions over the next three to four years. In line with this, the 5-year-old startup will raise $700 million in primary capital, in a round led by Walmart along with participation from some existing investors."

Teena Jose

News Desk Reporter with Entrepreneur India

Teena is a post graduate in financial journalism. She has an avid interest in content creation, digital media and fashion.
Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

News and Trends

Lightspeed Leads USD 40 Mn Series B Funding for SolarSquare

The company plans to use the fresh funding to expand its footprint to 50 cities, enhance its technology, hire talent, and strengthen its brand presence.

News and Trends

Recur Club Announces Credit Offerings for Startups Beyond Series A and SMEs

In FY 24–25, the platform also plans to deploy an additional INR 2000 crores through its Recur Swift program for startups.

News and Trends

Kalaari Capital's CXXO Initiative Sheds Light on Women Entrepreneurs' Struggles

The report highlights key findings on the gender funding gap, unconscious biases, and the resilience of women entrepreneurs.

News and Trends

India Moves Towards AI Regulation: IT Minister Highlights Need for Balanced Approach

Union Minister for Electronics and Information Technology, Ashwini Vaishnaw, emphasized the importance of addressing fake news while upholding freedom of speech

Entrepreneurs

Skills for the New Age Wedding Entrepreneur

These key skills are essentials for wedding entrepreneurs today, but when supplemented by refined taste that lends itself well to curating ideas for every budget, they make for an exceptional bouquet of services