After PhonePe, Razorpay Kicks Off 'Reverse Flipping' Process

Fintech giant Razorpay has started the process to move its domicile back to India from the U.S. amid the company's target for an initial public offering and tighter RBI data norms for payment providers.

A spokesperson for Razorpay confirmed the development but declined to offer a statement on the details. The story was first reported by ET.

This also comes months after PhonePe moved its domicile from Singapore to India, paying a large sum of tax—about Rs 8,000 crore—in the process.

Razorpay is valued at around $7.5 billion and was backed by Y-Combinator at a very early stage, for which it shifted its domicile to the U.S. despite the majority of its business being in India.

It has raised a total of $741.5 million in funding and counts over 1 crore businesses among its customers in India.

The full-stack payments platform also recently roped in former Deputy Governor of the Reserve Bank of India, NS Vishwanathan, as the chairperson for its newly formed advisory board, another step in boosting corporate governance as it prepares for an eventual listing.

The government, too, has put the emphasis on getting Indian companies back in the country, pushing GIFT City, Ahmedabad, as a possible destination. Earlier in March, the International Financial Services Centres Authority set up an expert committee, including Zerodha Broking Pvt.'s Nikhil Kamath and Groww's Lalit Keshre, to help Indian startups legally based outside the country return to India.

Many Indian startups are domiciled outside India despite having the majority of their market, personnel, and founders in India, it said. "These 'externalised' or 'flipped' startups constitute a large number of India's unicorns."

The Economic Survey 2023 also spoke about the importance of getting Indian unicorns back onshore and suggested various ways to incentivise companies.

In a YouTube live session in January, PhonePe Founder Sameer Nigam said there are over 20 unicorns who are vying to move their businesses to India if the local laws around it are tweaked to ease the process.

"We have almost 20 unicorns who have reached out to us about how we can make this easier. They are in talks with the government to make it easier for the businesses to move domicile back to India," he said.

RBI's data localisation norms for payment providers also require fintech to comply by storing their data in India, where they do business, instead of using on-cloud services that are hosted internationally.