Latter day, the news of Walmart’s acquisition of Flipkart panned out everywhere. At a valuation of nearly $21 billion, this deal has managed to generate one of the largest wealth pools for employees in India. With this deal being hammered down, the total worth of Flipkart’s employee stock ownership plans(ESOPs) has jacked up. Over and above, it includes invested shares worth $2 billion, approx. Rs. 13,455 crore. This establishes a fact that ESOPs held by about 100 employees of Flipkart is now estimated to be worth more than $1million.
Reportedly, Flipkart employees have struck gold with about $500 million drafted out to liquidate employee stocks as part of the Walmart-Flipkart deal. Data sourced by Capitaline and compiled by ETIG Database deduce that, with this recent change, Flipkart’s ESOPs is now worth the combined Esop pools of Axis Bank (Rs 5,065 crore), HCL Tech (Rs 5,498 crore) and Wipro (Rs 3,040 crore).
Follow-Through of Walmart-Flipkart Deal On Flipsters
Reportedly, there have been mixed reactions regarding the noted deal. A mobility engineer in Flipkart, Nikita Dasgupta says – “What matters to a majority of employees is what culture Walmart brings into Flipkart — whether it will continue with its ‘hire and fire’ culture or take a more liberal view.”
The US-based retail giant has already faced lawsuits from warehouse workers who accused Walmart for poor working conditions and safety violations.
For most employees, the larger question is how this acquisition is going to settle things down in Flipkart. The anxiety of employees grows since Walmart has its own labs in India. Infamous for not being employee friendly, there are rumours doing rounds that there could be possible job cuts.
A Word From The Walmart CEO To Flipsters:
Walmart CEO Doug McMillon addressed Flipkart employees, emphasizing the fact that this deal happens to be among the best decisions since India was the best place to spring up at. With a keen intention to “empower” Flipkart, McMillon also claims to learn from them about building full ecosystems and payments.
I am confident that this is one of the best decisions our company has made – we believe in India, have seen growth in India in every way. This is the best place to be anywhere in the world. – McMillon, Walmart CEO/President
Furthermore, the Walmart chief goes on to state that the values of the two companies were “very much aligned.”
A Brilliant Strategic Move Or A Quite Admission of Defeat?
The hot-off-the-fire deal is considered to be a brilliant strategic move to allow the US retail behemoth to operate globally. Yet, this deal is born out to be kind of a second best outcome after Walmart’s entry into Indian retail market was restricted by India’s foreign retail investment plans. Walmart has failed to build its own business since 11 years of being able to operate in India. Its joint venture with Bharti was also the faux pas. Walmart would have struggled to open its own e-commerce business since January, the Indian government made it relatively harder for multi-brand retailers to have retail outlets.
Hence, the move will aide Walmart in building an entire ecosystem around online commerce business, in this country and Walmart won’t just be restricted to “marketplaces”.
What’s On The Table: Walmart-Flipkart Deal
- Flipkart, which is currently a manpower driven company, will hopefully become tech-driven with Walmart’s entry.
- Flipkart will be listed on Indian stock exchanges as a fully-owned Walmart subsidiary down subsequent years.
- Stating that e-commerce is still relatively small-scale, the pact with Walmart is a great potential to grow.
- Although Walmart promises Flipkart employees to employ their own approach to operations, they both will maintain distinct operating strategies.
- Currently, online sales in India are worth about $19.6 billion.