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Home / News / Business News / Walmart-Flipkart deal turns many employees crorepatis: Details here
Business

Walmart-Flipkart deal turns many employees crorepatis: Details here

Walmart-Flipkart deal turns many employees crorepatis: Details here
Written by Gogona Saikia
May 10, 2018, 01:17 pm 2 min read
Walmart-Flipkart deal turns many employees crorepatis: Details here

Walmart's $16bn buyout of Flipkart has brought cheer not only to India's iconic start-up, but also to 3,000 of its current and former employees who hold shares with the company. Many of them, including Sameer Nigam, PhonePe CEO, former chief technology officer Amod Malviya, and former business finance chief Ankit Nagori, have turned dollar millionaires. This, thanks to a 100% buyback of vested ESOPs.

ESOP
Understanding the basics: What are ESOPs

Employee stock ownership plan, or ESOP, is an employee plan that gives a company's employees a purchase interest in the business in the form of stock options. Businesses provide their employees with ESOPs, mostly at no up-front charge. At Flipkart, stock options are granted over a four-year period, and employees are allowed to vest them every month after a one-year threshold.

Deal
All about the Walmart-Flipkart deal

In a major boost for Flipkart, US retailer Walmart has announced its acquisition of the company for a whopping $16bn, taking 77% stake. With this, Flipkart's valuation has jumped to $21bn from $10.2bn a year ago. The deal will see a series of exits, including of co-founder Sachin Bansal, investor SoftBank, and partially of shareholders Tencent Holdings and Tiger Global Management.

Employees
What the buyout means for current and former employees

Things are changing on the ground too, as the deal brings in one of the largest pools of wealth for employees in Indian history. Flipkart's ESOP pool has now risen to $2bn (Rs. 13,455cr), which is the combined worth of similar pools of Axis Bank (Rs. 5,065cr), Wipro (Rs. 3,040cr) and HCL Tech (Rs. 5,498cr). $500mn (RS. 3,367cr) has been allotted for liquidity of employee stocks.

Data
Shares now worth Rs. 10,000 each: Reports

As Group CEO Binny Bansal announced the 100% buyback of vested ESOPs at the employee town hall yesterday, there were loud cheers. TOI reports shares could be worth $150 (Rs. 10,000) a piece. Sachin Bansal's exit has brought him over $1bn for his 5.5% stake.

History
Flipkart is known for its impressive employee stock buybacks

Flipkart is known for its ESOP buybacks, which have turned many employees millionaires. In December, 3,000 staff members participated in its fourth ESOP repurchase worth $100mn, the largest such buyback by a private company in India till then. In 2015, it sold shares worth Rs. 240cr in its employee trust fund to allow employees to liquidate their shares. Even delivery boys have become multi-millionaires!

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“I may be on the side of the angels, but don’t think for one second that I am one of them.” Delhi University. Freethinker. “Social justice warrior”.
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