INRODUCTION

The main methods for a reverse flip (relocating a foreign company’s domicile to India) are an inbound merger and a share swap or share transfer. An inbound merger entails a foreign company merging with an Indian entity, while a share swap requires the shareholders of the foreign company to exchange their shares for shares in the Indian company. A third method involves creating a new Indian holding company that takes over the assets and liabilities of the foreign entity. 

1. Inbound Merger

a. Process: The foreign holding company merges into its Indian subsidiary under Sections 230–232 of the Companies Act, 2013, or through the fast-track route (Section 233), resulting in the Indian company becoming the surviving entity. All assets, liabilities, contracts, intellectual property, and obligations of the foreign company automatically vest in the Indian entity.

b. Shareholders: Shareholders of the foreign company receive shares in the Indian company in the agreed swap ratio, based on a valuation report.

c. Benefits: This can be a tax-neutral process under Indian tax laws if certain conditions are met, and is widely used by mature startups. 

2. Share Swap Arrangement 

a. Process: Shareholders in the foreign company exchange their shares for shares in the new or existing Indian company. The foreign company may then be liquidated.

b. Shareholders: This method directly involves shareholders exchanging their ownership stakes.

c. Considerations: This may trigger tax implications—such as the indirect transfer tax—and may require compliance with regulatory approvals, including those from the RBI and under the Companies Act, 2013.

3. Setting up a New Structure

a. Process: A new Indian holding company is incorporated with a shareholding pattern aligned to replicate the foreign shareholding structure, and the assets and liabilities of the foreign company are transferred to it.

b. Considerations: Although this method offers cleaner execution, it may lead to capital gains tax and may prevent the carry-forward of accumulated losses.

4. Share Transfer

a. Process: The foreign holding entity transfers the shares of the Indian subsidiary to its foreign shareholders. Once the Indian shareholding structure is aligned, the foreign entity may declare dividends or undertake capital reduction.

b. Shareholders: Share transfers require shareholders to execute transfer deeds, pay applicable stamp duty, and comply with FEMA pricing guidelines.

c. Considerations: This route may trigger capital gains tax, especially for non-resident shareholders. It may also require RBI approval/filings for share transfers. However, it is operationally simpler than a cross-border merger and works well when the foreign entity holds minimal assets.

A Few Examples of Reverse Flip Structures Used by Companies

Pine Labs

Pine Labs used the inbound merger method under Sections 230-232 of the Companies Act, 2013, to bring its parent entity back to India. This method involved the following key steps and features: 

1. Merger Structure: Pine Labs Singapore, which held a 99.89% stake in the Indian entity, was the amalgamating company, and Pine Labs India was the surviving or resultant company.
2. Regulatory Approvals: The process required approvals from multiple regulatory bodies in both countries, notably the Singapore High Court, India’s National Company Law Tribunal (NCLT), and the Reserve Bank of India.
3. Asset and Liability Transfer: Upon completion of the merger, all assets, properties, liabilities, rights, and obligations of the Singapore entity were transferred to and vested in the Indian entity.
4. Share Issuance: As consideration for the merger, the shareholders of Pine Labs Singapore were issued new shares in Pine Labs India. A valuation report was obtained from the registered valuer to determine the share swap ratio, and for every share held in the Singapore entity, investors received 127 shares in the Indian entity.

After the completion of its reverse flip, Pine Labs India converted into a public company and subsequently launched its IPO, with its shares listed on the NSE and BSE.

Similarly, Groww also opted for the inbound merger method to shift its parent entity to India, following a tax-neutral and regulator-approved structure, and it has since completed the Initial Public Offering (IPO) process and achieved domestic listing. Razorpay has also completed its reverse flip to India using the inbound merger route and is actively preparing for an IPO in India

PhonePe

PhonePe uses the reverse flip method to move its legal headquarters back to India from Singapore, primarily through a transfer of shares of its Indian entity, which was approved by the Singapore court.

How the reverse flip was executed

1. Share transfer: PhonePe completed the reverse flip using the share transfer method, whereby the shareholders of its foreign holding entity acquired the shares of the Indian entity from the majority shareholder in December 2022.
2. Operational migration: PhonePe moved all of its businesses and subsidiaries from Singapore to India. Phonepe India created a new ESOP plan and migrated all group employees to this plan. 
3. Improved IPO prospects: Relocating to India improved its prospects for a domestic IPO. A more supportive regulatory environment in India was a key factor in the decision.
4. Tax Implications: The shareholders faced long-term capital gains tax on the difference between their cost in the foreign holding entity and the value of the Indian shares that were allotted. According to some reports, accumulated losses from the Singapore entity became unusable after re-domiciliation because the structure triggered shareholding changes.

Phonepe India converted itself into a public company in April 2025 and has also filed a Draft Red Herring Prospectus (DRHP) with SEBI under the confidential route to raise funds through an IPO.

Sports Technologies (Dream11)

Dream Sports Inc. (the parent company of Sporta Technologies) successfully executed a reverse flip by shifting its holding structure back to India using the fast-track merger route under Section 233 of the Companies Act, 2013. This made Dream11 one of the first major Indian startups to use the Regional Director (RD) approval mechanism for the inbound merger of a foreign parent into its Indian subsidiary.

How the Reverse Flip Was Executed

1. Merger Structure:
Dream Sports Inc. (a foreign parent entity) was the Transferor company, and Dream Sports India (its wholly owned Indian subsidiary) was the transferee company. Post-merger, the Indian entity became the primary holding company for the group.

2. Fast-Track Approval (No NCLT):
Unlike earlier reverse flips that required NCLT approval, this transaction was processed entirely through the Regional Director (RD) under the fast-track process prescribed in Section 233, significantly reducing timelines and procedural complexity.

3. Regulatory Filings:
Though NCLT approval was not required, the process involved:

a. Filing a merger application with the RD

b. Obtaining a No-Objection Certificate from the RBI

c. Providing intimation to the relevant authorities under corporate and tax laws

d. Compliance with cross-border merger rules under Rule 25A

4. Asset & Liability Vesting:
Upon completion, all assets, liabilities, contracts, licences, and obligations of Dream Sports Inc. automatically vested in Sporta Technologies.

5. Share Issuance:
Shareholders of Dream Sports Inc. were allotted shares of Sporta Technologies as consideration for the merger, based on a valuation and swap ratio certified by a registered valuer.

The reverse flip enabled Dream Sports to simplify its global structure, align with evolving Indian tax and regulatory incentives, and position itself for future fundraising or listing in India.

Conclusion

Pine Labs, Groww, and Razorpay completed their reverse flips through inbound mergers, a tax-neutral mechanism in India that required approval from the National Company Law Tribunal (NCLT).

Dream11 (Dream Sports Inc.) became the first company to use the Section 233 fast-track/ RD-approval route for a reverse flip, enabling a faster and more simplified inbound merger of its foreign parent into its Indian subsidiary.

In contrast, PhonePe opted for a share transfer-based restructuring rather than a merger, which did not qualify as tax-neutral, resulting in substantial capital gains liability for its shareholders.

This reverse-flip trend illustrates how an increasing number of globally structured Indian startups are moving back to India to streamline operations and unlock better domestic opportunities.

For any clarifications or queries, please feel free to reach out to us at admin@fintracadvisors.com 

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