On Friday, Flipkart announced a $50 million employee stock buyback programme. It will provide liquidity to around 7,000-7,500 staff members. It is poised for a potential public offering.
The company, last valued at $35 billion, will allow employees to sell up to 5% of the options vested over the last three years. All active employees as of July 5 can liquidate up to 5% of their outstanding options vested since July 6, 2022, Flipkart group chief executive Kalyan Krishnamurthy wrote in a note to employees. The buyback price is set at $174.32 per option, with payments expected in August 2025.
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According to the Economic Times, he also wrote that if the company achieved its key goals by year-end, it could offer another 5% Esop buyback early next year.
The Big Billion Days, usually held in October, is the company's flagship annual sale event, and the announcement by Flipkart's chief executive comes ahead of this event. This event contributes a substantial portion of its yearly sales.
Flipkart’s last major Esop buyback was in 2023, when it bought back the stock options worth $700 million from current and former employees. Topping the $500 million offered by Flipkart when Walmart acquired it in 2018, it has been the largest Esop buyback by an internet firm in India.
Having conducted Esop buybacks aggregating to $1.5 billion across various tranches in the past six to seven years, Flipkart has emerged among the biggest wealth creators over the past decade of India's internet economy.
“Let’s always remember that in an industry as dynamic and competitive as ours, past successes are a foundation for future achievements. The opportunities in our country are immense,” Krishnamurthy wrote in his letter.
Esops are used as a retention tool by companies, and the latest payout by Flipkart is coming at a time when multiple senior and mid-level executives at the company have left to join rivals, especially in the quick commerce space.
“Our core businesses are performing well, and quick commerce continues to scale at an unprecedented pace…,” Krishnamurthy wrote to employees.
