Flipkart Considers Shifting Domicile to India in Anticipation of IPO

E-commerce leader Flipkart is reportedly contemplating a shift in its corporate domicile, potentially moving its holding company from Singapore back to India. This move aligns with a growing trend of late-stage Indian companies returning to domestic soil, according to a media report.

Strategic Move Tied to IPO Aspirations

The potential domicile shift is believed to be strategically linked to Flipkart’s aspirations for an initial public offering (IPO) in the near future, as reported by the Economic Times (ET). This relocation would position Flipkart for a successful public listing on the Indian stock exchange.

Following PhonePe’s Lead

Walmart-controlled Flipkart would be the second company within its group to undertake such a move. PhonePe, the digital payments platform previously under the Flipkart umbrella, successfully completed a “reverse flip” in December 2022, officially separating from Flipkart before relocating its domicile to India.

Tax Implications and Valuation Considerations

The exact tax burden associated with Flipkart’s potential domicile shift remains undetermined. The final amount hinges on the company’s current valuation, which would be established through independent audits. As of December 2023, Flipkart boasted a valuation of $33 billion after receiving a $600 million funding infusion from existing investors. This valuation currently positions Flipkart as the most valuable private company of Indian origin. Prior to its separation from PhonePe, Flipkart held a valuation of $37.6 billion secured through a $3.6 billion investment led by SoftBank in July 2021. Entrackr has reached out to Flipkart for comment on this potential development.

Walmart Maintains Majority Stake

Walmart currently holds an approximately 85% ownership stake in Flipkart. The remaining shares are distributed amongst Tencent (7.1%) and CPP Investment (2.3%). Flipkart co-founder Binny Bansal officially severed ties with the company in January 2024.

A Growing Trend: Reverse Flips Gain Momentum

Flipkart’s contemplation of a domicile shift reflects a broader trend within the Indian startup ecosystem. Fintech unicorn Groww became a recent forerunner in this movement, successfully relocating its base back to India from the US in March 2024. Several other notable companies, including KreditBee, Pine Labs, Razorpay, Meesho, Eruditus, and Zepto, are also reportedly considering similar “reverse flip” maneuvers.