Flipkart's past and present employees set for New Year bonanza. Details here


by 5paisa Research Team Last Updated: Dec 28, 2022 - 10:25 am 5.3k Views

Flipkart's $700 million one-time cash payout will benefit at least 25,000 past and present company employees, making it one of the biggest wealth creation instances in the Indian startup ecosystem, a report by Moneycontrol said.

Who will pay so much cash to present and past Flipkart employees?

Investors of Flipkart, including Walmart, will pay for the cash payout and benefit past and present employees of Flipkart, Myntra and PhonePe.

How is this cash payout different from ESOPs?

This cash payout is different from a typical equity or ESOP buyback as here, they are not selling any options but getting money as a part of the company's move to separate PhonePe. The company announced the payout on December 23.

What did the company actually say?

"We are pleased to announce that employees, who are holders of Flipkart ESOPs (employee stock option plans), will receive a one-time discretionary cash payout as part of the transaction. This payout represents the value of the PhonePe holding within those Flipkart options," Kalyan Krishnamurthy, CEO of Flipkart, told employees in an internal mail, as reported by Moneycontrol.

How was the share price of Flipkart calculated? 

The share price of Flipkart was determined at $165.83, excluding PhonePe. However, the payout will be $43.67 per option. This shows that the company's valuation has nearly doubled since its acquisition.

When was the separation of PhonePe completed?

Earlier this week, Flipkart said it had completed the separation of PhonePe, which it acquired in 2015. PhonePe has recently moved its registered office from Singapore to India and is looking to launch an IPO in the country.

Why is the timing of this IPO crucial?

The listing plan comes at a difficult time in the markets. PhonePe's closest competitor, Paytm, has seen a 75 per cent drop in its valuation since its listing in November 2021.

How do you rate this blog?


Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage

About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.

Open Free Demat Account

Resend OTP
Please Enter OTP
Account belongs to

By proceeding, you agree to the T&C.

Latest Blogs
Nifty Outlook for 8 June 2023

Post consolidating in a range for the last few days, Nifty resumed its uptrend and rallied higher led by broader market participation. The index surpassed the 18700 mark and ended well above that with gains of around seven-tenths of a percent.

  • Jun 07, 2023
Bearer Cheque

Introduction A bearer cheque is an efficient and adaptable financial tool. It is a method of payment where the cheque is made out to the owner or bearer of the document. Bearer cheques enable the holder to cash or deposit the cheque without any requirement for identification or endorsement, in contrast to other cheques payable to a specific person or business.

  • Jun 06, 2023
Best Indicators for Intraday Trading

Introduction Intraday trading, also known as day trading, is a fast-paced trading strategy where traders aim to take advantage of short-term price fluctuations in financial markets. To succeed in this highly competitive arena, traders rely on various best indicators for intraday to make informed decisions and maximize their chances of profitability.

  • Jun 06, 2023

Start Investing Now!

Open Free Demat Account in 5 mins

Enter Valid Mobile Number