Why companies flip back
- Listing in India: an Indian IPO generally needs an Indian listed entity at the top.
- Investor base: more capital is now available from Indian funds and public markets.
- Simplicity: one main jurisdiction instead of a US parent with an Indian operating company, two sets of compliance and transfer pricing.
- Regulatory access: some sectors and government programmes favour Indian-owned-and-controlled companies.
Several well-known startups have completed reverse flips in recent years. For the original decision, see the Delaware flip guide.
The two main routes
| Inbound merger | Share swap | |
|---|---|---|
| How | The US holding company merges into its Indian subsidiary; shareholders receive shares of the Indian company | Shareholders of the US company exchange their shares for shares of the Indian company, which then holds (and may later wind up) the US entity |
| Key approvals | Companies Act merger process (NCLT, or the fast-track route where eligible) plus FEMA cross-border merger rules | FEMA pricing and reporting for non-residents acquiring Indian shares; overseas-investment rules for the Indian company acquiring the US shares |
| Typical use | Where the US parent has little besides the Indian subsidiary | Where a direct swap is simpler or the US entity must continue for a period |
What changed in 2024–2026
- Share swaps (August 2024): amendments to the FEMA non-debt instrument rules clarified that non-residents can acquire Indian company shares in exchange for shares of a foreign company, aligning with the overseas investment rules.
- Fast-track merger (September 2024): the Companies (Compromises, Arrangements and Amalgamations) Rules were amended so that a foreign holding company merging into its wholly owned Indian subsidiary can use the fast-track route under Section 233 — approved by the Regional Director rather than the NCLT — with prior RBI approval.
- Wider fast-track (September 2025): further amendments extended the fast-track route to more categories of mergers.
- RBI cross-border merger amendments (May 2026): the RBI amended its Cross-Border Merger Regulations to better align FEMA with the company-law process.
Indian tax
- Indian tax law provides exemptions for certain amalgamations and for shareholders receiving shares in an amalgamation, where the prescribed conditions are met — which is one reason the merger route is popular.
- Share swaps need a careful look at capital-gains treatment for Indian-resident shareholders of the US company and at valuation.
- From 1 April 2026 the analysis runs under the Income-tax Act, 2025 — check the corresponding provisions for transactions after that date.
US tax: the big variable
Moving the top company out of the US is an outbound transaction for US tax, and it is often where the largest costs arise:
- Shareholders and the US company can be taxed on built-in gains when US shares or assets move to a foreign company, depending on how the transaction is structured.
- Anti-inversion rules may apply when former US-company shareholders end up owning most of the new Indian parent. At the highest continuity levels, the Indian company can be treated as a US corporation for US tax — unless an exception applies, most commonly where the group has substantial business activities in India, tested against employee, asset and income thresholds.
- IP held in the US — moving it abroad can trigger its own US tax charge.
Companies that reverse-flipped ahead of IPOs have reportedly paid significant tax to do so. US tax advice is essential before choosing a route.
Other workstreams
- ESOPs: US-parent options must be replaced or converted into Indian-company options — see US parent ESOPs.
- Investor rights in the Delaware documents move into the Indian articles and shareholders’ agreement — within what Indian law and listing rules allow.
- FEMA reporting for the new foreign shareholders of the Indian company — see FC-GPR and FC-TRS.
- Winding down the US entity if it isn’t needed — see closing a Delaware company.
Reverse flips so far
| Company | From | Route / timing (as reported) |
|---|---|---|
| PhonePe | Singapore | Shareholders moved to the Indian company, completed 2022; about ₹8,000 crore of tax reportedly paid |
| Groww | US | NCLT-approved merger (March 2024); listed in India in November 2025 |
| Zepto | Singapore | NCLT order January 2025 |
| Dream Sports (Dream11) | US | Merger through the Regional Director fast-track route, 2025 |
| Razorpay | US | Fast-track merger and demerger, completed around May 2025 |
| Meesho | US | NCLT-approved merger (May 2025); IPO December 2025 |
| Pine Labs | Singapore | Singapore court (2024) and NCLT (April 2025) approvals |
| Flipkart | Singapore | Indian company became the holding company after government approval, reported March 2026 |
Why now: Indian listings have followed within months for several of these, and since June 2025 SEBI lets founders classified as promoters keep ESOPs granted at least a year before the draft prospectus. Ready to plan yours? See the reverse flip service.
Frequently asked questions
What is a reverse flip?
Moving a startup's holding company from abroad — commonly Delaware — back to India, usually through an inbound merger of the foreign parent into its Indian subsidiary or a share swap, so the Indian company becomes the top entity.
What is the fast-track route for reverse flips?
Since September 2024, a foreign holding company merging into its wholly owned Indian subsidiary can use the fast-track merger process under Section 233 of the Companies Act, approved by the Regional Director instead of the NCLT, with prior RBI approval.
Is a reverse flip taxable in the US?
It can be. Moving the parent company out of the US is an outbound transaction; shareholders and the US company may be taxed on built-in gains, and anti-inversion rules can apply unless an exception such as substantial business activities in India is met.
Is a reverse flip taxable in India?
Indian tax law has exemptions for qualifying amalgamations and for shareholders receiving shares in them, so an inbound merger can be tax-neutral in India if conditions are met; share swaps need separate capital-gains analysis.
Please note: this guide is general information based on the rules as they stood on the review date above. Regulations and RBI/CBDT procedures change often — please get advice on your specific facts before acting.