Before 2025 ESOPs in startups were often dismissed as paper wealth. Employees held options for years with no path to sell them. That changed in 2025.
Qapita data shows 16 startups enabled employees to liquidate a $1 billion in ESOPs through mainboard IPOs in 2025. That compares with 10 companies and $807 million in 2024 and 4 companies and $39 million in 2023. Meesho, Groww, Urban Company, Pine Labs and PhysicsWallah were among the listings that drove the wave.
Buybacks ran alongside the IPOs. Inc42 data shows 12 startups conducted ESOP buybacks in 2025 with over 9,200 employees liquidating than ₹1,409 crore.
Flipkart: the single ESOP wealth event
Flipkarts ESOP history is the most visible in Indian startups.
When Walmart acquired Flipkart in 2018 over 100 employees became crorepatis collectively liquidating to $100 million in ESOPs. That was the starting point for ESOP wealth creation in India.
Since then Flipkart has run repeated buybacks. In July 2025 the company announced a $50 million buyback covering 7,000 to 7,500 employees allowing them to liquidate up to 5% of their options accumulated over the previous three years. In July 2026 it announced another $50 million buyback. By 2025 cumulative ESOP buybacks at Flipkart had reached $1.5 billion.
Swiggy and Razorpay: liquidity before the listing
Swiggy ran buybacks before its IPO. By 2025 it had completed five ESOP liquidity events over ₹1,000 crore benefiting more than 3,200 employees. The ESOP plans spanned 2015 to 2024. The fair value of the 2024 plan reached ₹120 to ₹448 per share in FY26.
Razorpay built an ESOP culture for a private company. By 2024 it had completed four ESOP liquidity events all while still private each timed alongside a funding round. In December 2024 Razorpay granted ESOPs ₹1 lakh to every existing employee, a move that is rare in Indian startups. Its first buyback in 2018 allowed 140 employees to liquidate. The 2022 buyback, worth $75 million benefited 650 former employees.
A former Razorpay employee wrote on LinkedIn that these liquidity events were “not mandatory “. The founders chose to run them repeatedly reflecting a belief that “equity should be real wealth creation, not a long-term promise.”
PhonePe and Meesho: buybacks at scale
PhonePe ran a ₹700-800 crore ESOP buyback in 2025 covering around 1,000 employees. It had previously run a ₹135 crore buyback, in which founders Sameer Nigam and Rahul Chari chose not to participate.
Meesho launched an “ESOP for all” programme allowing every full-time employee regardless of seniority to convert up to 25% of their CTC into ESOPs with a minimum of ₹50,000. Meesho had already completed three buybacks roughly $6 million.
Other notable ESOP events
BrowserStack announced a $125 million buyback in January 2026 benefiting around 500 employees. Across three buybacks the total reached $275 million.
Unacademys ₹50 crore buyback saw 8 employees receive over ₹1 crore each 17 receive over ₹50 lakh and 38 receive over ₹10 lakh.
Urban Companys ₹203 crore ESOP buyback included one employee who had accepted a slightly lower salary in exchange for double the ESOPs. Those options eventually turned into crores in the buyback.
Darwinbox completed an ₹8.6 crore buyback covering over 350 employees its third in four years.
CoinDCX ran an ₹11.1 crore buyback covering than 500 current and former employees.
The reality: wealth is concentrated among employees
The stories are encouraging but the wealth is not evenly distributed.
One employee who received a Swiggy offer analysed on LinkedIn that the real winners were the 500 early employees who joined before 2018. Their ESOPs may have grown more than 10x. Employees who joined after 2018 unless the companys valuation jumped substantially did not accumulate options to become crorepatis.
The Urban Company case supports this. The employee who made a return had joined early accepting lower cash compensation in exchange for double the equity.
Longhouse data shows that 35 non-founders in India currently hold ESOPs over ₹10 crore each. That number is projected to reach 100 by the end of 2027.
The double tax structure
ESOP wealth faces a two-stage tax structure when it is realised.
At exercise: The difference between the market value (FMV) and the exercise price is treated as a perquisite and taxed at the applicable slab rate. For employees of DPIIT-recognised startups the tax can be deferred under Section 192(1C) until the earlier of 48 months from the end of the assessment year of allotment the date of sale or the date of leaving the company.
At sale: Capital gains tax applies based on the holding period. For listed shares gains held over 12 months are taxed at 12.5% above ₹1.25 lakh and gains held under 12 months at 20%. For foreign shares the long-term holding period is 24 months with gains taxed at 12.5% without indexation.
One tax professional noted that for employees of mature tech companies the perquisite tax at exercise must be paid without any cash proceeds creating a structural burden. Employees are advised to plan a sell-to-cover strategy or keep funds ready before exercising.
What retail investors can take from this
Joining matters more than negotiating salary. The Urban Company employee who chose equity over cash created more wealth than the salary difference would have. In startups joining early and accepting cash compensation for more equity is the core of ESOP wealth creation.
The maturity of liquidity channels was the turning point. Before 2025 the main problem with ESOPs was the lack of a buyer. The scale of IPOs and buybacks converted paper wealth into cash. Flipkart, Swiggy and Razorpay showed that repeated buybacks provide an alternative to waiting for an IPO.
ESOPs are an incentive, not a universal benefit. Wealth is concentrated among employees, high performers and long-tenured staff. Employees who joined Swiggy after 2018 with options may not have achieved the same returns. The wealth effect depends on the timing of joining, the valuation trajectory and the length of the vesting period.
Tax planning has to happen before exercise. The perquisite tax at exercise is a cost, payable without any cash proceeds. For startup employees the deferral mechanism provides some relief but not all employees qualify. Calculating the tax impact before exercising is a part of managing ESOP wealth.
FAQs
1. What was the total ESOP wealth created in India in 2025?
IPO-driven ESOP liquidations reached $1 billion across 16 startups. Buybacks added over ₹1,409 crore across 12 companies benefiting than 9,200 employees.
2. What is Flipkarts ESOP buyback history?
Flipkart has run least five major ESOP buybacks since 2018 with cumulative value around $1.5 billion. The 2018 Walmart acquisition made over 100 employees crorepatis. Buybacks of $50 million each were announced in 2025 and 2026.
3. What is unusual about Razorpays ESOP policy?
Razorpay ran four ESOP liquidity events while still private each timed with a funding round. In December 2024 it granted ESOPs ₹1 lakh to every existing employee, a rare move in Indian startups.
4. How are ESOPs taxed in India?
At exercise the difference between the market value and the exercise price is taxed as a perquisite at slab rates. At sale the gain above the exercise-date FMV is taxed as capital gains. Listed shares held over 12 months attract 12.5% LTCG tax above ₹1.25 lakh. Unlisted shares held over 24 months attract the rate.
5. Do all startup employees become crorepatis through ESOPs?
No. Wealth is concentrated among employees. The real winners, at Swiggy were the 500 employees who joined before 2018. Employees who joined later with options did not accumulate the same returns.
