Flipkart Gets NCLT Nod to Shift Base to India Before IPO

Walmart-backed e-commerce company Flipkart has received clearance from the National Company Law Tribunal (NCLT) to shift its domicile back to India from Singapore, ahead of its highly anticipated initial public offering (IPO) next year.

In an order dated December 12, the principal bench of the NCLT approved the proposed “Scheme of Amalgamation” between Flipkart Internet Private Limited and multiple Singapore-based entities, including the parent company Flipkart Private Limited, logistics arm Ekart, fashion e-tailer Myntra, fintech platform Super Money, online travel agency Cleartrip, and Flipkart Health.

“In light of the foregoing facts and discussion, particularly the positions taken by the relevant authorities, and upon considering the approval granted by the members and creditors of all the Transferee and Transferor Companies to the proposed Scheme, there appears to be no impediment to sanctioning the Scheme,” the order read.

The tribunal has directed Flipkart to place on record the proceedings in Singapore for final approval. Once granted, all Singapore-based entities will be subsumed under Flipkart Internet.

“…keeping in view the definition of effective date, which is subject to final approval from the respective court in Singapore, the Scheme shall not come into effect until all the conditions of the effective date are met, including orders from courts and relevant authorities in Singapore,” the NCLT said.

Reverse Flip Parade: Why is Flipkart Shifting Base Back to India?

Flipkart relocated its headquarters to Singapore in 2011, a trend common among Indian startups at the time, which were shifting base to geographies such as Dubai and the US for faster fundraising and more favourable tax norms.

This trend, however, is now reversing. Several homegrown startups, including Meesho, Zepto, Pine Labs, Groww, and PhonePe, among others, have shifted their base back to India in recent times. Increased investor appetite for new-age tech listings is driving this “reverse flip” phenomenon.

While Meesho, Pine Labs, and Groww have already made their stock market debuts, PhonePe has filed draft papers with the Securities and Exchange Board of India (SEBI) via the confidential pre-filing route for a Rs 12,000 crore IPO.

It is worth noting that shifting registration from overseas to India comes at a hefty cost. For instance, Flipkart’s sister company PhonePe had to pay Rs 8,000 crore in taxes to the Indian government to move its base back to India in 2022.

The Hurdle to Flipkart’s Reverse Flip

Chinese investor Tencent owns an estimated 5–6% stake in Flipkart. As a result, the Singapore parent entity requires approval from the Centre under Press Note 3 rules, which regulate investments from countries sharing a land border with India.

MediaNama has reached out to Flipkart seeking confirmation on whether it has sought government approval to bring the Singapore parent under the fold of the Indian entity. The story will be updated upon receiving a response.

India amended its foreign direct investment (FDI) policy in 2020 to enforce the Press Note 3 rules, under which any foreign investment into a domestic company from a country that shares a land border with India requires government clearance.

Flipkart’s largest shareholder is Walmart, which acquired a 77% stake in the company for $16 billion in 2018. As of January 31, 2024, Walmart’s increased its stake in Flipkart to nearly 85%.

The Profitability Puzzle

As the e-commerce platform accelerates preparations for its highly anticipated IPO, Flipkart group entities are still chasing profitability. Losses for Flipkart Internet, Cleartrip, and eKart narrowed in the fiscal year ended March 2025 (FY25), but revenue growth remained muted amid a broader slowdown in the retail market.

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Flipkart Internet reported a 14% year-on-year (YoY) increase in operating revenue to Rs 20,493.3 crore in FY25, while losses narrowed 37% YoY to Rs 1,494.2 crore.

Myntra, however, emerged as an outlier, posting a consolidated net profit of Rs 548.3 crore in FY25, marking its second consecutive profitable year. Revenue from operations rose 18% YoY to Rs 6,042.7 crore during the year under review.

Flipkart’s IPO will follow the listing of younger e-commerce rival Meesho, which made its stock market debut on December 10.

With IPO in the Offing, Flipkart Faces Growing Regulatory Ire

Flipkart’s IPO plans come at a time when the company is facing heightened regulatory scrutiny. In September 2024, India’s antitrust regulator, the Competition Commission of India (CCI), found that Flipkart and rival Amazon engaged in anti-competitive practices, including favouring select sellers and prioritising certain product listings on their platforms.

Flipkart also led e-commerce companies in terms of consumer grievances in FY24, according to data presented by the Ministry of Consumer Affairs in response to a Lok Sabha query. The National Consumer Helpline (NCH) recorded 1,60,857 complaints against Flipkart, making it the most complained-about e-commerce platform for the fourth consecutive year.

More recently, MediaNama reported on allegations that Flipkart used dark patterns, basket sneaking, misleading pricing, and deceptive advertising practices on its platform.

Earlier in July, the Enforcement Directorate lodged a case against Myntra, companies linked to it, and their directors for alleged violations of the Foreign Exchange Management Act (FEMA) amounting to Rs 1,654 crore.