Gurugram-based used cars marketplace Cars24 said it has initiated an employee stock ownership plan (ESOP) buyout programme worth Rs 35 crore ($4.7 million).
Employees who took a voluntary pay cut during the Covid-19 lockdown in exchange for ESOPs, can liquidate 100% of their stocks for 3.3X premium of the allotted price, a statement said. Employees can also cash out 30% of previously issued vested stocks, it added.
“2020 has been a difficult year for everybody, with a lot of employees stepping in and contributing across the company. The ESOPs will help our employees enjoy the bonus and extra liquidity during the festive season after facing a tough time during the pandemic,” Vikram Chopra, CEO and co-founder of Cars24, said.
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This is the third employee stock liquidation event at the company, which currently employs over 3,000 people across India.
Founded in 2015 by Chopra and Mehul Agrawal after selling FabFurnish to Future Group, Cars24 provides a tech-enabled platform to buy and sell pre-owned vehicles. The company works with over 10,000 channel partners from more than 230 cities across India, and operates more than 210 branches in over 70 cities.
Cars24 is backed by investors such as Sequoia India, Exor Seeds, Apoletto, Kingsway Capital, KCK, Unbound and Moore Strategic Ventures.
Several startups have used ESOPs as a tool to compensate for the pay cuts during the initial phase of Covid-induced lockdowns.
On Wednesday, food delivery unicorn Swiggy unveiled a share buyback programme worth $7-9 million and social commerce app Meesho said it would buy back ESOP shares worth about $5 million. Both startups have been in the news for laying off a significant number of people in 2020, owing to depleted revenues caused by the Coronavirus-led dip in demand for their services during the nationwide lockdowns.