Walmart to acquire Flipkart ESOPs worth ₹5,760 crores; employees to benefit

In a letter to its current employees, Flipkart had announced that they will be allowed to liquidate their employee stock ownership plans (ESOPs) at $126-128, depending on charges applicable.

As Walmart is obligated to acquire 6,242,271 shares from Flipkart’s ESOP pool of 11,947,026 shares, according to the recent filing by the retail major Walmart with the US Securities and Exchange Commision.

With the current estimations Walmart will acquire ESOPs worth about ₹5,760 crores ($800 million), out of the total Flipkart ESOPs worth around ₹10,800 crores ($1.5 billion), based on per-share purchase price.

After Flipkart investor’s reaping huge profits from the $16 billion Walmart-Flipkart deal, it is time for Flipkart employees to reap in their share of the profits.

“The ESOP repurchase programme, a yardstick for the industry, is part of our continuing efforts to thank and reward our employees for their service,” a spokesperson for Flipkart said in an emailed statement.

It is to be noted that the current Flipkart employees will be able to liquidate 50% of their vested ESOPs, following the close of Walmart-Flipkart transaction, while another 25% will be could be liquidated one year after the first liquidation and the remaining 25% at the end of two years following the first liquidation.

In December, Flipkart had bought back ESOPs worth more than $100 million from over 3,000 current and former employees from the online retailer, its fashion arms Myntra and Jabong, and its digital payments arm PhonePe.

Lately, more and more Indian startups are going the ESOPs way to keep their employees motivated and looking forward to the growth of the startup.

Last month, logistics startup Rivigo’s former employees encashed ESOPs worth ₹71 crores. Also, Indian hospitality giant OYO approved the new ESOP plan for its employees, offering better benefits.

Earlier, Indian food delivery unicorn Swiggy had approved its first employee stock repurchase programme.


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