Flipkart to buy back ESOPs worth $700 million as part of PhonePe hive off

Flipkart will buy back employee stock options worth about $700 million from employees as a part of its move to separate full ownership of payments and financial services unicorn PhonePe, as the e-commerce giant looks to hire and retain talent at a time when most startups in the country are undertaking layoffs due to the ongoing funding winter.

"We are pleased to announce that employees, who are holders of Flipkart ESOPs (employee stock option plan), 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. Moneycontrol reviewed a copy of the mail.

"The new share price of Flipkart has been determined at $165.83 per option (previously $189.1), excluding the value of PhonePe. The payout to employees will, however, be at US$43.67 per option, reflecting the increase in the market valuation of PhonePe," Krishnamurthy added.

While Krishnamurthy did not mention the full value of the buyback, a person close to the development told Moneycontrol that it will be worth $700 million. He also said that the employees who would be eligible for the buyback would be receiving additional information and details on this payout shortly. The number of employees who would benefit from the payout remains unclear. Flipkart did not comment on the story.