Flipkart completes ESOP repurchase program of more than $100 million
More than 3,000 current and former employees of Flipkart, Myntra, Jabong and PhonePe took part in the stock repurchase program.
- Over 3,000 employees of Flipkart took part in the stock repurchase program.
- The ESOP repurchase program was initiated by the company in October.
- The company has been valuated at $7.9 billion by Valic Co.
Home grown e-commerce marketplace, Flipkart has announced completion of its employee stock ownership plan (ESOP) repurchase program on Wednesday.
In an emailed statement, the company said that more than 3,000 current and former employees of Flipkart, Myntra, Jabong and PhonePe took part in the stock repurchase program, the company said in an emailed statement.
“Employees are our biggest source of strength, without whom 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. We’re delighted to be setting the benchmark on this important parameter, not only in the startup industry but the wider Indian private sector as well,” said Sachin Bansal, Chairman of Flipkart, and Binny Bansal, Group CEO.
"This also marks the fourth instance in the past five years when Flipkart has given its ESOP holders an opportunity to encash a percentage of their vested stock options, an unparalleled feat among startups and private companies in India," Flipkart added.
Flipkart had initiated the ESOP repurchase program back in October this year and gave eligible workers an opportunity to sell part of their vested ESOP units.
The move by the board of Flipkart to repurchase ESOP was estimated to benefit 6000 of current and former employees, the company had said.
Flipkart said that the buyback program will heavily benefit the employees who have been with the company from 2010.
“Flipkart employees get a threshold period of one year, the stock options start vesting on monthly basis over a four-year period after the first year of employment. The decision is welcomed by Flipkart employees across company’s locations in India,” the company added.
Flipkart had raised $4 billion funding from Softbank and Chinese internet giant, Tencent. The firm was valued at $11.6 billion after this round of funding.
However, Flipkart’s valuation was recently trimmed by Mutual fund investor Valic Co to $7.9 billion.
In 2016, the company has faced a total of four valuation markdowns as it changed CEOs three times.
Morgan Stanley had made a steep valuation markdown of 27% of Flipkart in February 2016. The valuation drop affected the valuation of ESOPs owned by Flipkart employees, a report by Techgig said.