In a one-time payout, e-commercial giant Flipkart will benefit at least 25,000 former and present employees with a $700 million cash payout. This is set to become the biggest wealth reaction instance in the Indian subcontinent business ecosystem, reported by Moneycontrol.
Investors that includes even Walmart will pay for the cash payout and benefits made available to past and present workers of three different companies — Flipkart, Myntra, and PhonePe.
However, Flipkart remained silent regarding the situation.
This cash distribution varies from traditional equity or ESOP buyback in that no shares are being traded; instead, the payment is being collected as a portion of the company’s decision to split PhonePe. On December 23, the industry makes the compensation public.
“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.
Without considering PhonePe, its stock value of Flipkart was estimated to be $165.83. Yet, the per-option payment will be $43.67. This indicated that after its takeover, the company’s valuation has somewhat doubled.
This week, Flipkart stated that the 2015 takeover of PhonePe had been entirely separated.
PhonePe has shifted its listed headquarters from Singapore to India and intends to make a first public offering here.
The proposal will, though, come at a challenging period for the markets. Paytm, the closest rival to PhonePe has suffered a 75% fall in worth since making it public in November 2021.
Just weeks away from gaining its biggest funding from General Atlantic, which would boost PhonePe to the position of the nation’s most productive fintech, the company has raised its operational margin.
The fintech startup is seeking to secure a fresh round of fundraising at a worth of roughly $12 billion, according to Moneycontrol, which broke the story first in October.
Once Flipkart sold all of its PhonePe shares, the share price must be changed to reflect the company’s value excluding PhonePe.
A draft of Flipkart CEO Kalyan Krishnamurthy’s statement to workers, received by Moneycontrol, indicated that the Board of Directors established the new price of the stock of Flipkart at $165.83 per option, instead of the previous $189.1 pricing, which also took PhonePe’s value into effect.