Flipkart staff to benefit from $100 million ESOP repurchase plan


The share buyback plan could be the largest such programme till date in the Indian start-up sector.

Through what may become a benchmark initiative in the Indian start-up industry, the board at Flipkart has apparently approved a plan to repurchase employee stock options worth over $100 million. If accomplished, the move could benefit around 6,000 current and former employees at the online retailer.

The share buyback plan could be the largest such programme till date in the Indian startup sector, as it offers stakeholders the biggest opportunity, so far, to liquidate their holdings in the company. Reportedly, the overall corpus reserved for buyback of shares from employees is over $100 million.

The development follows the $4 billion funding Flipkart raised this year from investors, such as Japan’s SoftBank Corporation and Chinese internet conglomerate, Tencent.

In addition to Flipkart, employees of its subsidiaries— Myntra and payments unit PhonePe— will also be a part of the repurchase programme. The plan is expected to close by December. The employees will be allowed to sell a specific percentage of their vested shares under the programme.

People aware of the plan are guessing that a few senior former employees of the company could even make tens of crores from this opportunity. Flipkart’s stock options are granted over a four-year period, with employees vesting them every month after the one-year threshold.

To provide liquidity for its employees, in 2015, Flipkart had sold some shares— worth about 240 crore— in its employees’ trust fund to high net-worth individuals for the first time in eight years. Liquidity was also generated through share buybacks, especially for Flipkart’s early employees who had been with the company since 2010.

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