ETtech Morning Briefing: New Flipkart Millionaires, Sachin Bansal's exit & more

1. Newly minted Flipkart millionaires

What's the news?

Flipkart employees are in for a windfall gain with about $500 million outlined towards liquidity of employee stocks as part of the company’s sale to Walmart, according to two people familiar with the matter.

How much are these people going to get?

Walmart’s acquisition of Flipkart at a valuation of nearly $21 billion has generated one of the largest pools of wealth for employees in India’s corporate history.

The deal has lifted the total worth of Flipkart’s employee stock ownership plans, including unvested shares, to $2 billion (about Rs 13,455 crore), these people said.

ESOPs held by about 100 current and former employees of Flipkart are now estimated to be worth more than $1 million, one of them said. Walmart will offer a 100% buyback of vested shares by Flipkart employees, ET Now reported, citing sources.

2. Biyani looking to sell 10% to global biggie

What's the news?

Indian retail’s deal counter will keep buzzing. As Walmart announced its takeover of Flipkart, Future Group, the country's biggest brick and mortar retailer, is looking to close a deal of its own – sell at least 10% stake to a global retailer.

What did Biyani say?

“I will sell a minority stake to the strongest global retailer”, Future Group founder Kishore Biyani told ET on Wednesday without divulging any names. But a person in the know said Biyani has held early talks with Walmart and Amazon, the two American retail giants who will now be direct rivals in India.

3. Sachin Bansal exits Flipkart

What's the news?

Sachin Bansal, the group chairman of Flipkart who until even a few weeks ago was leading the negotiations with American suitor Walmart, has been left “very disappointed” by recent events that have left him on the sidelines as the company he cofounded a decade ago notched up its biggest milestone, according to people privy to developments.

What next for Sachin?

Sachin Bansal will now sell his 5.5% stake for about $1 billion and exit the company.

Exhorting “Flipsters” to continue to do a good job, (Sachin) Bansal in his Facebook post lauded the company, which he said “truly upheld audacity and customer centricity ….and solved many complex problems for India.”

“I’ll be watching and cheering from the outside,” he wrote even as he takes time off to brush up on his “coding skills and take to “gaming.”

4. All izz well with Flipkart Walmart deal

What's the news?

Walmart’s acquisition of Flipkart should not face any policy hurdles in India as the e-commerce major runs a marketplace in which 100% foreign direct investment is allowed. The $16 billion deal will see only $2 billion fresh inflow into the company.

India allows 100% FDI in e-commerce marketplace subject to certain restrictions.

What are the conditions?

If Walmart continues the same model and Flipkart complies with all conditions after acquisition there would no violation of FDI violation and the deal would not require any approval.

Another comfort is that no exchange of shares has happened in India. Flipkart is controlled by a Singapore registered entity and the acquisition of shares has happened in that company and not an Indian entity.