Flipkart employees set to be richer as Walmart to buy ESOPs worth $800 Mn

India online retailer Flipkart’s employees will now be able to liquidate their employee stock ownership plans (ESOPs).

The liquidation of conferred Employees Stock Options (ESOPs) will be in a range of $126-128 per share, based on charges applicable, said a Flipkart letter to employees.

US retailer Walmart is obligated to buy 6,242,271 shares worth around $800 million from Flipkart’s ESOP pool of 11,947,026 shares, according to ET report quoting a recent filing with the US Securities and Exchange Commission.

Bengaluru-based e-tailer total ESOPs is worth about $1.5 billion based on per share purchase price. As per Flipkart spokesperson, the repurchase scheme is part of company’s effort to thank and reward employees for their services.

ESOPs can be liquidated in three installments — half of ESOPs can be liquidated on the date of closing of the deal; 25 per cent a year later, and the rest two years after the first liquidation.

At present, employees can liquidate 50 per cent of their vested ESOPs following the close of the Walmart-Flipkart transaction.

Ten months ago, Flipkart bought back ESOPs worth over $100 million from more than 3,000 employees, who owned ESOPs across Flipkart, Myntra, Jabong and PhonePe.

In May this year, the Arkansas-based retail giant acquired 77 per cent stake for $16 billion in Flipkart.

The Indian e-tailer is targeting sales of $1.5-1.7 billion in October during the Billion Days, almost double compared to last year.

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