Pine Labs Gets Singapore Court Nod to Move Base to India

Pine Labs, a company specializing in merchant commerce and payments, has secured approval from a Singapore court to merge its local entity, Pine Labs Limited (PLS), with its Indian counterpart, Pine Labs Private Limited (PLI). This move signifies a consolidation of the company’s operations under its Indian umbrella.

According to a regulatory filing submitted by PLS in Singapore, the amalgamation agreement entails the transfer of all assets and liabilities from PLS to PLI. Shareholders of the Singapore entity will become shareholders in PLI, and any ongoing legal proceedings against PLS will continue under PLI’s purview.

The filing further clarifies that upon receiving a National Company Law Tribunal (NCLT) order and subsequent registration with the Registrar of Companies, the Singapore entity will be dissolved without going through a formal winding-up process.

Pine Labs Joins Growing Trend of Fintech Firms Shifting Domicile to India

Pine Labs’ relocation to India marks a growing trend within the fintech industry. Following in the footsteps of PhonePe and Groww, Pine Labs becomes the third major fintech company to shift its primary base from overseas to India. Several other players, including KreditBee, Razorpay, Meesho, Zepto, and even e-commerce giant Flipkart, are currently exploring similar moves.

Valuation and Tax Implications: Factors Influencing the Decision

In April, US investment firms Baron Funds and Invesco assigned valuations of $5.8 billion and $4.8 billion to Pine Labs, respectively. It’s important to note that valuation plays a significant role in determining the tax burden associated with such domicile shifts.

While Pine Labs has expressed interest in an initial public offering (IPO) for several years, its attempts to secure bankers for a US IPO last year proved unsuccessful. The company has yet to disclose a timeline for a potential listing on any stock exchange.

Regulatory Considerations and Future Outlook for Fintech in India

A growing emphasis on domestic headquarters within the fintech sector is emerging. This trend is partly driven by the belief that Indian regulators can exercise greater oversight and due diligence over locally headquartered companies. However, such relocations can also come with substantial tax liabilities, as evidenced by PhonePe’s investors incurring an Rs 8,000 crore tax payment to facilitate their own domicile shift.