Flipkart invests $100 million to buyback stocks from employees
Indian e-commerce major Flipkart has spent around Rs 642 crore (approx $100 million) to buy back stocks from current and former employees under the company’s Employee Stock Ownership Plan (ESOP) programme.
Flipkart and its subsidiaries offer its employees stock options under the ESOP plan which can be cashed in as and when required by the employees.
The company has brought back stocks given as incentives to around 3000 employees of Flipkart, Myntra, Jabong and PhonePe spending Rs 642 crore in the process which according to the firm is the biggest ESOP buyback by an unlisted company in the country.
Earlier, there were some discrepancies with regards to this programme as employees that were issued shares at $15 billion valuation of the company where affected due to the falling valuation of Flipkart last year.
However, the company had stated that differential grant will be made available so that the total dollar value of options allotted to an employee remains unchanged.
“Employees are our biggest source of strength, without which Flipkart couldn’t have built the e-commerce industry in India. As an organisation, we believe they should be equal partners in Flipkart’s success. This ESOP repurchase programme is an extension of that culture, and a token of thanks for the dedication and hard work they have put in over the years”, Binny Bansal, Group CEO said in a statement.
“We’re delighted to be setting the benchmark on this important parameter, not only in the start-up industry but the wider Indian private sector as well,” said Sachin Bansal, chairman of Flipkart.
Flipkart had secured nearly $2.5 billion in funding from Japan's SoftBank Group in August. Employees and ex-employees are believed to be selling their shares in the Indian e-commerce firm as part of a $2.5 billion investment deal agreed with Japan’s SoftBank Group.
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