Flipkart to payout $700M to ESOP holders for PhonePe separation: Report
After the Flipkart-PhonePe split, the ecommerce giant will make a one-time payment of $700 million to current and former employees commensurate to the value of PhonePe in their ESOPs.
Employees at ecommerce platformwho own shares through Employee Stock Ownership Plan (ESOP) are looking at a cumulative payout of $700 million this month as part of the hive-off process of payments company .
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, said media reports. Tracxn
Flipkart sent out an email to its employees that 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.
The company did not respond to specific queries sent by YourStory at the time of publishing.
Flipkart acquired payments company PhonePe in 2016 for $20 million. The latter operated as a subsidiary of Flipkart till December 2022 when both companies announced full separation of ownership. The separation unlocks value for the majority shareholder Walmart. The US-based retail giant holds nearly 72% stake in Flipkart while its shareholding in PhonePe was close to 85% as on June 2023.
Since its demerger, PhonePe has been in the process of raising $1.1 billion from the likes of TVS Capital Funds and General Atlantic, among others. The company was valued at $12 billion as of February 2023, according to market research and data platform .
PhonePe holds nearly 50% market share by value in UPI payments and has been growing its payment business aggressively. It recently announced its entry into Point-of-Sale devices to woo merchants.
Edited by Affirunisa Kankudti