Bengaluru-based fintech unicorn Razorpay is reportedly in the process of moving its parent entity back to India from the US, as it prepares for a potential listing on the Indian stock exchange. The reverse flipping process has already begun, according to sources cited by ET, and comes after PhonePe, a rival digital payments firm, also moved its holding company from Singapore to India earlier this year.
The move by Razorpay, which was valued at $7.5bn in a recent funding round, follows a recommendation by an expert committee set up by the Indian government to encourage local startups domiciled abroad to relocate to Gujarat International Finance Tec-City’s International Financial Services Centre (GIFT-IFSC).
Razorpay’s management and board are said to be keen on the move, despite the process being capital-intensive. PhonePe, which made the same move, reportedly paid close to $1bn in taxes to the Indian government before moving its domicile to India. Razorpay’s situation is complicated further as it awaits a final decision on its application with the Reserve Bank of India (RBI) for a payment aggregator license. The startup has also been barred by the RBI from onboarding new merchants until the latter issues the license.
Razorpay was founded in 2014 and was the second-ever Indian startup to make it to Y Combinator, which requires a startup to move its domicile when raising funding from the incubator.
Razorpay’s parent entity is currently in the US, while Cashfree, another YC-backed payments startup, has a parent entity in the US. While sources cited by ET said an IPO was not a priority for Razorpay, the move back to India is likely to spark interest in the fintech sector, which has seen a boom in recent years.
