Country’s largest online retailer Flipkart has completed its $100 million buyback of employee stock options (ESOPs), which has made it the largest ever share buyback program in the history of the startup ecosystem in India. Flipkart mentioned that more than 3,000 existing and former employees of Flipkart, Jabong, Myntra and PhonePe had taken part in the share repurchase program.
Flipkart founders Sachin and Binny Bansal mentioned that employees are the biggest source of strength without whom Flipkart could not have been built in the e-commerce industry in India. As an organization, we believe they should be equal partners in the success of Flipkart. This ESOP repurchase program is an extension of the culture and a token of thanks for the dedication and hard work they have put in over the years. They further mentioned that they were delighted to be setting a benchmark on this important parameter and not only in the startup industry but wider Indian private sector as well.
In the last five years, Flipkart has completed at least four such buybacks though none could scale the latest program. SoftBank, the Japanese telecom and internet conglomerate had offered to buy the shares from investors and former and existing employees of Flipkart which would value Flipkart at roughly $9-10 billion. Earlier in the year, Flipkart had raised close to $4 billion funding from the investors which include SoftBank, Tencent and Microsoft.
Startups like Paytm and Blackbuck have also executed similar buybacks from the staff. Flipkart mentioned that it started the program in October wherein the eligible current and former employees of the company were offered to sell a part of their vested ESOP to the company. This program is the single largest liquidity providing event in the country by a private, unlisted company to its ESOP holders.
SoftBank had offered to purchase those shares at roughly $85-89 apiece and had also imposed caps on the quantity of stocks each employee could sell. Goldman Sachs managed the share sale program.