Flipkart plans to shift domicile from Singapore to India
E-commerce titan, Flipkart, is reportedly considering a shift of its domicile or holding company from Singapore to India. This move is part of the company's strategy for an upcoming initial public offering (IPO), as per a report by ET. Walmart-controlled Flipkart would be the second entity in the group to undertake such a transition, following PhonePe's separation and relocation in December 2022.
Tax implications of Flipkart's proposed relocation
The relocation of Flipkart's domicile could result in significant tax implications. This is based on the precedent set by PhonePe, whose investors had to pay ₹8,000 crore in taxes for its relocation. The tax amount for changing domicile depends on the company's valuation and third-party audits. Flipkart was last valued at $33 billion after securing $600 million funding from existing backers in December 2023.
Flipkart's valuation and ownership structure
Flipkart is the most valued Indian-origin private company to date. Walmart currently owns approximately 85% of Flipkart, with Tencent and CPP Investment owning 7.1% and 2.3% shares, respectively. The company's valuation dropped from $37.6 billion to its current value of around $33 billion following its separation from PhonePe, the digital payments and financial services company.
Other companies following the relocation trend
The trend of relocating back to India is not exclusive to Flipkart and PhonePe. Recently, fintech unicorn Groww announced its decision to move its base back to India from the US, completing the process in March this year. Other companies such as KreditBee, Pine Labs, Razorpay, Meesho, Eruditus and Zepto are also reportedly working on similar moves.
