PhonePe announces Esop buyback of up to ₹135 cr

Digital payments platform PhonePe has announced a buyback plan for employee stock options issued last December.

Nearly 75% of the employees are eligible to liquidate their options, due to vest next month, as part of the buyback, PhonePe said.

The firm issued options to all its 2,200 staffers as part of the employee stock option plan (Esop) launched last December. The options had a minimum value of ₹3.5 lakh, totalling ₹1,500 crore.

The founders will not participate in the buyback, but the top leadership of the company is eligible to sell a 10th of their vested options, while the other employees are allowed to liquidate up to a fourth of their vested options.

The Esop buyback is worth ₹135 crore.

The employees will complete one year cliff of their stock vesting next month, said Manmeet Sandhu, the firm’s head of human resources. “Almost 75% of our current workforce is eligible to participate in the current buyback offer and for most it is the first time in their careers that they have either owned Esops or had a chance to liquidate them,” she said.

PhonePe raised close to $700 million last December in a round led by Walmart, which owns the payments platform. At that time, the payment services platform officially spun off from Flipkart to become an individual entity and was valued at $5.5 billion.

India’s digital payments market, expected to more than double in size from 2019 levels to $135 billion in 2023, has also attracted the likes of Amazon, Google and Facebook. Firms typically offer Esops to attract and retain talent. In some cases, it is estimated that Esops make up as much as 60-70% of the compensation packages of top executives.

Many companies have this year allowed their staff to liquidate their Esops. Last month, Fashnear Technologies, which operates social commerce platform Meesho, announced a $5.5 million Esop programme to buy back the vested stocks from eligible employees, both current and former.

In August, health and fitness platform HealthifyMe announced ₹90 crore liquidity to almost 100 current and former employees. Many other tech-focused companies such as Locus, Moglix, Flipkart, upGrad, Whatfix and Unacademy have also set up Esop buyback events this year.