Flipkart, a leading Indian e-commerce company, began rolling out cash payout worth $700 million to more than 18,000 former and current employees on July 14, as confirmed by an internal email to staff from the company CEO Kalyan Krishnamurthy.

Share Market Live

NSE

This move comes as a means to compensate current and former employees for the loss of share value following the separation of PhonePe, Flipkart's digital payments subsidiary.

CNBCTV-18 reported the news on July 10 that the cash payout is being facilitated by Walmart, which acquired a majority stake in Flipkart in 2018.

“Flipkart announced the complete separation of the PhonePe business by selling off its entire shareholding in December 2022. With this development, Flipkart’s Board of Directors had decided to pay $43.67 as compensation for each ESOP (Employee stock ownership plan) as of the record date of December 23, 2022,” Krishnamurthy wrote in the email.

“Further to the communication made on April 21, 2023, regarding this payout, I am delighted to inform you that the much-awaited compensation will be made today, July 14, 2023,” he said.

Some former employees are also eligible for the payout. As it stands, Myntra, a fashion e-commerce platform owned by Flipkart, has about 2,500 to 3,500 employees, while Flipkart boasts a workforce of over 15,000 individuals.

This cash payout is likely to be the last buyback programme undertaken by Flipkart before its much anticipated initial public offering (IPO). The company has been contemplating going public for some time now, and this move could be seen as a step towards that goal.

In a separate development, PhonePe, Flipkart's digital payments arm, has moved its domicile to India and successfully raised $850 million in funding this year.

General Atlantic, a leading global growth equity firm, has contributed $550 million to this funding round. Other investors include Walmart, the parent company of Flipkart, and Ribbit Capital. The latest funding round values PhonePe at a staggering $12 billion.

PhonePe has refrained from making any official comments regarding the funding or its future plans. The company's success in raising substantial capital, highlights the growing demand for digital payment solutions in India, where the government has been actively promoting a cashless economy.

(Edited by : Keshav Singh Chundawat)