Flipkart Offers More ESOPs to Employees to Stabilise Stakes After Valuation Drop

E-commerce major Flipkart will issue additional shares to eligible employees in efforts to ensure their stake remains at a "steady level" after the latest fund raising round that came at a lower valuation.

The Bengaluru-based firm, which competes with the likes of Amazon and Snapdeal, has recently raised $1.4 billion at a valuation of $11.6 billion.

This is lower than the previous funding raised in 2015, when Flipkart was valued at $15.2 billion.

Employees who are part of ESOP (employee stock option plan) programmes across the Flipkart group, including Myntra and PhonePe, were informed of the move through an email.

Flipkart to Invest Latest Funding in New Businesses Like PhonePe

Flipkart Group CEO Binny Bansal said the differential grant was being made, so that the total dollar value of options allotted to an employee remain unchanged.

This was being done to ensure that the employee's equity stake in the company stayed at a steady level.

"As an organisation, Flipkart takes immense pride in being the employer of choice for thousands of professionals - a vaulted status that only comes with a deep, company-wide sense of transparency and fairness. If Flipkart does well, so should you," Bansal said.

Flipkart to Grow With Careful Considerations to Costs, Says Co-Founder

In recent years, Indian startups have increasingly offered ESOPs as a way to curb attrition and help employees build long-term wealth.

The eventual windfall, however, hinges on whether the company is able to list publicly, or if it buys back the shares.