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Flipback Tax: Razorpay restructures to cut levy; Groww pegs tax outgo at $70 million

Economic TimesEconomic Times · 1y ago
Flipback Tax: Razorpay restructures to cut levy; Groww pegs tax outgo at $70 million
Medial

Indian startups that were originally domiciled abroad are now making moves to shift their registered entities to India. Razorpay, a digital payments firm valued at $7.5 billion, has initiated a restructuring process to bring all of its India units under a single local holding company. This move is expected to reduce the company's tax outgo. Similarly, online stockbroker Groww has completed its domicile shift to India, accounting for around $60-70 million in taxes. Other startups, such as quick-commerce firm Zepto, are also planning to shift their domiciles to India. This trend is driven by the desire to align with regulatory frameworks and potentially prepare for IPOs in India.

Flipkart targets to shift domicile from Singapore to India

EntrackrEntrackr · 1y ago
Flipkart targets to shift domicile from Singapore to India
Medial

E-commerce major Flipkart is planning to shift its domicile or holding company from Singapore to India, according to a media report. With this, it will join several late stage companies which are also planning to move back to India over the next few months. The domicile shift can be linked to Flipkart’s plan to go for an initial public offering (IPO) in the near future, ET reports. Walmart-controlled Flipkart will be the second firm from the group which is planning to shift the domicile. Earlier, PhonePe became the first to do a reverse flip. It’s worth highlighting that PhonePe was fully separated from Flipkart Group in December 2022. PhonePe’s investors had to pay Rs 8,000 crore in taxes to the government for the move and Flipkart is also expected to pay heavy taxes in the process. The quantum of the tax to move domicile depends on the company’s valuation and third-party audits. Flipkart was last valued at $33 billion after a $600 million funding from existing backers in December last year. Also, it’s the most valued Indian-origin private company till now. In July 2021, Flipkart received $3.6 billion led by SoftBank at a valuation of $37.6 billion. The company was revalued at $33 billion after separation from PhonePe. Entrackr has reached out to Flipkart for comments. Walmart owns nearly 85% stake in Flipkart followed by Tencent and CPP Investment which own 7.1% and 2.3% shares, respectively. The company’s co-founder Binny Bansal officially exited the company in January this year. Most recently, fintech unicorn Groww announced moving back its base to India from the US. The firm already completed the process in March this year. Besides the above-mentioned three companies, KreditBee, Pine Labs, Razorpay, Meesho, Eruditus and Zepto have been working on reverse flips.

Razorpay acquires majority stake in POP with $30 Mn investment

EntrackrEntrackr · 1m ago
Razorpay acquires majority stake in POP with $30 Mn investment
Medial

Razorpay acquires majority stake in POP with $30 Mn investment Rewards-first UPI payments app POP has raised $30 million from Razorpay to grow its payments and commerce platform. With this, Razorpay has acquired a majority stake in the Bengaluru-based startup. While POP did not share further transaction details, it will operate as a separate entity. Earlier in June last year, POP had raised $2.4 million in its seed funding round led by India Quotient and a few prominent angel investors. The fresh proceeds will be used to improve its products, grow its merchant base, and enhance its rewards program. POP started its UPI platform in June 2024. It claims to have crossed 6 lakh daily transactions and 1 million unique monthly transactions within the first year. According to the company, it fulfilled 2 lakh orders and issued over 40,000 RuPay credit cards in collaboration with Yes Bank. POP’s main feature is POPcoins, a multi-brand rewards currency that consumers earn when making payments or shopping on the platform. These POPcoins can be redeemed across POP’s extensive merchant network, offering users flexible and valuable incentives. Razorpay’s investment in POP expands its services into loyalty, engagement, and commerce. POP’s payments and rewards ecosystem lets merchants reward transactions and payments directly. Previously in September 2022, Razorpay acquired PoshVine to add loyalty and rewards to its payments stack. POP will help Razorpay serve merchants by offering payments, loyalty, and engagement services in a single platform. The development follows Razorpay’s recent announcement to shift its domicile back to India from the US. While the company has no immediate plans for a public listing, it has completed key regulatory steps, including its transition into a public limited company and securing approval for the merger of Razorpay Inc. with Razorpay India. Razorpay stands out as one of the few profitable unicorns in the fintech space, having reported revenue of Rs 2,068 crore and a profit of Rs 35 crore in FY24. The company is yet to announce its FY25 results.

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