Flipkart, Myntra employees to get cash payouts worth $700 mn after separation of PhonePe

New Delhi, 9th July 2023: Employees of Flipkart and its fashion e-commerce affiliate Myntra will receive a cash compensation of approximately $700 million. The compensation is intended to recompense qualified current and former employees for the share value loss caused by the separation of Flipkart’s digital payments business PhonePe.

Walmart, which acquired a majority share in the e-commerce company in 2018, will enable the transaction, which is scheduled to be finalised soon. The company’s Human Resources department has written letters to eligible Flipkart and Myntra employees, according to CNBC TV-18 who sources familiar with the situation.

While Flipkart employs over 15,000 people, Myntra employs approximately 2,500-3,500 people. The cash payout would most likely be Flipkart’s final repurchase programme before its much-anticipated initial public offering (IPO) in 2023.

PhonePe was purchased by Flipkart in 2016 for $20 million. PhonePe was Flipkart’s subsidiary until December of last year, when both companies declared a complete split of ownership. Despite the corporate split, Walmart remains the parent firm of both Flipkart and PhonePe. Walmart will retain a majority stake in both enterprises.

PhonePe and Flipkart released a joint statement saying, “As part of this transaction, existing Flipkart Singapore and PhonePe Singapore shareholders, led by Walmart, have purchased shares directly in PhonePe India. This completes the move to make PhonePe a fully India domiciled company, a process that started earlier this year. Walmart will remain the majority shareholder of both business groups.”

Flipkart CEO Kalyan Krishnamurthy stated that despite its separation from Flipkart, PhonePe will continue to scale and fulfil its mission of giving financial inclusion to Indians.