Wealth managers go after Flipkart’s new millionaires
BENGALURU: After Walmart paid out hundreds of millions of dollars to past and present Flipkart employees late last month, wealth management advisers and financial services startups have seen a spike in activity as the beneficiaries of the Walmart buyout seek to diversify their new wealth.
The top beneficiaries of the Walmart deal are, however, mostly planning to use their new wealth to invest in startups, venture capital funds and buy luxury products and real estate, according to 10 current and former Flipkart employees Mint spoke with.
In May Walmart agreed to buy a 77% stake in online retailer Flipkart for $16 billion, the biggestever deal in India’s startup ecosystem. As part of the deal, Walmart was to pay roughly $800 million toward employee stock option plans (Esops) in tranches, a chunk of which was paid out in late October to employees of Flipkart and its units, Myntra and PhonePe.
“Largely there are three buckets where Flipkart people are spending,” said Ankit Nagori, co-founder at CureFit and former Flipkart chief business officer. “One, is on buying cars and bikes and similar luxury items. Secondly, a bunch of people are investing in mutual funds and other investment vehicles. And third, the top earners will invest in startups and become LPs (limited partners) in venture funds.”
Groww, an investment platform started by former Flipkart employees, launched an investment product with the title “Better Than FD (fixed deposit) For Esop and Bonus Money” on the day Walmart paid out cash to the Flipkart employees, chief executive Lalit Keshre said. Already, more than 250 people have invested in the product, said Keshre, a former senior product executive at Flipkart.
Some employees who received their ESOP payouts are spending money on more glamorous things than mutual funds. At least a dozen employees have booked new apartments in up-and-coming high rises in Bengaluru in the startup belt of Koramangala, HSR and Sarjapur.
Among Flipkart employees, the biggest payout of the Walmart deal went to Flipkart co-founder and former executive chairman Sachin Bansal, who has big plans to deploy his wealth. Mint reported earlier this month that he is in talks to invest in startups including Ola and Ather Energy.