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Iron out ‘reverse flipping’ kinks: Startups tell govt

Economic Times

Economic Times · 4m ago

Iron out ‘reverse flipping’ kinks: Startups tell govt

The Indian government is working to simplify the 'reverse flipping' process, which allows startups domiciled overseas to relocate to India. However, startups are urging further reforms to remove procedural hurdles, particularly around complex shareholding structures and foreign investment regulations. Successful examples include Dream Sports and Pine Labs relocating operations to India. The Ministry of Corporate Affairs plans to expand the fast-track merger scope to aid more startups, while companies like Razorpay and Meesho are undergoing the process.

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Govt fast-tracks approval process for overseas-headquartered startups' mergers into Indian arms

Economic Times

Economic Times · 11m ago

Govt fast-tracks approval process for overseas-headquartered startups' mergers into Indian arms

To boost reverse flipping, India has announced a fast-track approval process for merging a foreign-incorporated startup with its Indian arm. The National Company Law Tribunal (NCLT) clearance requirement will be eliminated, and instead, Reserve Bank of India (RBI) approval will be necessary along with government approval. This change, effective from September 17, will benefit startups founded by Indians overseas who want to return to India and take advantage of the country's growth opportunities. The move aims to simplify the regulatory process and tap into India's favorable capital markets and government support.

‘Ghar-wapsi of Indian companies’: Zerodha’s Nithin Kamath lauds govt move to fast-track start-ups’ ’reverse flipping’ | Mint

Livemint

Livemint · 11m ago

‘Ghar-wapsi of Indian companies’: Zerodha’s Nithin Kamath lauds govt move to fast-track start-ups’ ’reverse flipping’ | Mint

Zerodha co-founder Nithin Kamath praised the Indian government's decision to simplify the approval process for merging an overseas-incorporated company, particularly a startup, with its wholly-owned Indian subsidiary. The move eliminates the need for clearance from the National Company Law Tribunal, which has been delaying such mergers. The updated regulations aim to facilitate "reverse flipping," where startups return to India to take advantage of regulatory and investment opportunities. Kamath highlighted the growing Indian stock market, increased household investments, and the need for more Indian businesses to be located in India.

ET Soonicorns Summit 2024: Reverse-flipping a trend, the future language of machines might be English, funding spring imminent, Karnataka’s booming startup ecosystem, and bridging the gender funding gap—morning wrap

Economic Times

Economic Times · 11m ago

ET Soonicorns Summit 2024: Reverse-flipping a trend, the future language of machines might be English, funding spring imminent, Karnataka’s booming startup ecosystem, and bridging the gender funding gap—morning wrap

The ET Soonicorns Summit 2024 in Bengaluru featured various insightful sessions. BV Naidu, Chairman of Karnataka Digital Economy Mission, highlighted the thriving startup ecosystem in Bengaluru, which has produced 53 out of India's 115 unicorns. Hari Menon, Co-founder of BigBasket, discussed the growth of quick commerce, while Mayank Kumar, Co-founder and MD of upGrad, explored the future of machine learning and coding languages. Other panels addressed topics such as reverse-flipping startups, bridging the gender funding gap, and balancing regulatory issues in fintech. The summit continues with sessions on fundraising strategies.

What’s next for India’s unicorn club in 2024?

Inc42 · 1y ago

What’s next for India’s unicorn club in 2024?

The Indian startup ecosystem experienced a slowdown in creating new unicorns in 2023, with only two emerging, marking the lowest number since 2017. However, as investors regain confidence in 2024, at least a dozen startups are expected to join the unicorn club. The fintech sector is likely to produce the most new unicorns, followed by ecommerce and enterprise tech. Startups are also considering going public to secure funds, with 14 tech startups expected to list in 2024. Additionally, the trend of reverse flipping, or redomiciling Indian startups back to India, is becoming prominent.

MCA Exempts Startups Looking To Reverse Flip From NCLT Nod

Inc42 · 11m ago

MCA Exempts Startups Looking To Reverse Flip From NCLT Nod

The recent MCA notification brings clarity to regulations and compliance requirements for reverse flipping to India. Starting from September 17, the RBI's approval will be necessary for mergers or amalgamations, in addition to the government's approval. This development is significant as companies like Pine Labs, Flipkart, Zepto, and Eruditus have expressed intentions to reverse flip back to India in preparation for their upcoming IPOs.

Startups Flipping Back Will Not Be Spared From Taxes: Goyal

Inc42 · 1y ago

Startups Flipping Back Will Not Be Spared From Taxes: Goyal

Indian startups considering reverse flipping to move their headquarters back to India will have to bear tax liabilities, according to Union commerce minister Piyush Goyal. He stated that it would be difficult to justify exempting certain companies from paying taxes solely for moving back to India. Goyal added that many companies went outside India for their own selfish reasons and their return is not an altruistic move. The issue of angel taxes and valuation norms was also discussed, with Goyal emphasising the need to balance the concerns of startups and the prevention of illegal activities.

Reverse flipping by Indian startups gathers steam: Here’s all you need to know

Economic Times

Economic Times · 2m ago

Reverse flipping by Indian startups gathers steam: Here’s all you need to know

Several Indian startups are re-domiciling to India from overseas for better listing prospects and regulatory benefits. Companies like Meesho, Flipkart, Dream Sports, Zepto, and Groww have undergone or are undergoing this 'reverse flipping' process. Meesho is nearing its IPO in India, while Flipkart plans a public listing by 2026. Dream Sports, Zepto, Pine Labs, and Groww have successfully moved back, paying significant taxes, while Razorpay and PhonePe are also relocating their parent entities to India.

India’s listed digital firms’ market in early days as ‘reverse flipping’ gains steam: Bay Capital

Economic Times

Economic Times · 2m ago

India’s listed digital firms’ market in early days as ‘reverse flipping’ gains steam: Bay Capital

India's digital-first companies, valued over $90 billion, remain in early stages of market maturity, with a significant concentration in a few firms. Bay Capital reports a trend of startups "reverse flipping," moving their domicile to India for IPOs, driven by better capital availability and valuations. Regulatory changes and a richer domestic capital pool fuel this trend. The market is expected to grow, but sustainable business models and strong governance are deemed crucial for long-term success.

Zepto Joins Reverse Flip Parade; Eyes India IPO In 2026

Inc42 · 1y ago

Zepto Joins Reverse Flip Parade; Eyes India IPO In 2026

Indian unicorn Zepto, backed by Nexus, is considering a reverse flip to India, aiming for registration as an Indian company by 2024 and a public listing by 2026. The reverse flipping structure is yet to be finalized, but Zepto is reportedly exploring a share swap, with shareholders of the Singapore entity receiving shares of the Indian entity. This move aligns with a trend among Indian unicorns to redomicile to India, but challenges, such as tax implications and regulatory approvals, need careful consideration.

Moglix Has Desh Wapsi On The Cards As It Eyes 2027 Public Listing

Inc42 · 1y ago

Moglix Has Desh Wapsi On The Cards As It Eyes 2027 Public Listing

B2B ecommerce platform Moglix is planning to relocate its base to India as it aims to make a public market debut within the next two years. The move follows a trend among Indian startups looking to tap into the domestic capital markets and benefit from the ease of doing business in India. However, there are significant tax implications associated with the reverse flipping process. Moglix's CEO, Rahul Garg, highlighted the company's strong brand presence in India as a favorable factor for its listing there. The company reported an operating revenue of INR 4,664.7 Cr in FY23, with losses reaching INR 193 Cr.

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