Flipkart to purchase again $50 million in worker inventory; 7,500 workers could profit, ETCFO
Flipkart on Fridayannounced a $50 million worker inventory buyback programme, which can present liquidity to round 7,000–7,500 workers members because the Walmart-owned ecommerce large gears up for a possible preliminary public providing.
The corporate, final valued at $35 billion, will enable staff to promote as much as 5% of the choices vested over the past three years. All lively staff as of July 5 can liquidate as much as 5% of their excellent choices vested since July 6, 2022, Flipkart group chief govt Kalyan Krishnamurthy wrote in a observe to staff. The buyback value is ready at $174.32 per possibility, with funds anticipated in August 2025.
If the corporate achieves its key objectives dedicated to the board by year-end, it might provide one other 5% Esop buyback early subsequent yr, he wrote. ET has seen a replica of the observe. Flipkart has round 22,000 staff.
The announcement comes forward of the corporate’s flagship annual sale occasion, The Massive Billion Days, which is often held in October and contributes a considerable portion of its yearly gross sales.
Flipkart’s final main Esop buyback was in 2023, when it purchased again the inventory choices price $700 million from present and former staff. That has been the biggest Esop buyback by an web agency in India, topping the $500 million supplied by Flipkart when Walmart acquired it in 2018.
Over the previous decade of India’s web economic system, Flipkart has emerged among the many largest wealth creators, having carried out Esop buybacks aggregating to $1.5 billion throughout varied tranches previously six to seven years.
Esops are used as a retention software by firms, and the newest pay-out by Flipkart is coming at a time when a number of senior and mid-level executives on the firm have left to hitch rivals, particularly within the fast commerce house.
“Our core companies are performing properly, and fast commerce continues to scale at an unprecedented tempo…,” Krishnamurthy wrote to staff.
Flipkart’s fast commerce unit, Minutes, is predicted to have 800 darkish shops by the tip of this yr.
“Let’s at all times do not forget that in an business as dynamic and aggressive as ours, previous successes are a basis for future achievements. The alternatives in our nation are immense,” Krishnamurthy wrote in his letter.
The corporate is aiming to file papers for its preliminary public providing (IPO) subsequent yr.
Over the previous yr, a number of new-age firms have concluded Esop buybacks. These embrace software-as-a-service agency Darwinbox, IPO-bound at-home companies platform City Firm, society administration app Mygate, ecommerce agency Meesho, edtech startups Classplus and Adda247, and managed healthcare supplier Even Healthcare.
