Flipkart IPO Nears: NCLT Approves Domicile Shift to India

Flipkart Moves Closer to Domestic Listing

Walmart-owned e-commerce company Flipkart has secured approval from the National Company Law Tribunal (NCLT) to shift its legal domicile from Singapore back to India. This decision marks a crucial milestone in the company's long-term preparations for a potential initial public offering (IPO) on Indian stock exchanges, which is anticipated in 2026. The NCLT's sanction allows Flipkart to proceed with the complex legal and regulatory procedures required to restructure its corporate framework, positioning its Indian entity at the forefront of its operations.

The Mechanics of the 'Reverse Flip'

The process, often referred to as a 'reverse flip,' involves transferring the ownership of the overseas holding company to an Indian entity. With the NCLT's approval, Flipkart can now execute its planned 'Scheme of Merger by Amalgamation.' This phased consolidation will merge several Singapore-incorporated units—including those housing its fashion, logistics, and payments businesses—into Flipkart Internet Private Limited, its Bengaluru-based operating company. Subsequently, the primary Singapore-based holding company, Flipkart Private Limited, will also be folded into Flipkart Internet. This move will establish Flipkart Internet as the principal holding company for the entire group in India, simplifying its corporate structure and aligning its legal base with its core market.

Rationale for Returning to India

Flipkart originally moved its headquarters to Singapore in 2011, a strategy commonly adopted by Indian startups at the time to attract global capital and leverage a stable regulatory environment. However, the landscape has evolved significantly. The increasing depth of Indian capital markets, coupled with a stronger regulatory push for domestic listings, has prompted a growing number of large technology firms to reverse this decision. By re-domiciling, Flipkart aims to better align its corporate structure with its operational footprint, which is overwhelmingly concentrated in India. The company stated the move will lead to more efficient management, eliminate duplicate corporate procedures, and simplify inter-company transactions.

Navigating a Complex Restructuring

Unlike smaller startups, Flipkart's domicile shift is a significantly more involved process due to its massive scale and complex, multi-layered ownership structure. While US-based retail giant Walmart holds a majority stake of approximately 77%, Flipkart's shareholder base includes a diverse group of global strategic and financial investors. Notable backers include Google, SoftBank, Microsoft, Qatar Investment Authority, and Tencent. The phased merger plan approved by the NCLT is designed to carefully navigate this complexity, ensuring a smooth consolidation of all its business units, including key subsidiaries like Myntra and Ekart, under the new Indian parent entity.

Remaining Regulatory Hurdles

While the NCLT approval is a major legal victory, Flipkart's journey to complete re-domiciliation is not yet over. The company still requires formal clearance from the central government under the Press Note 3 rules. This requirement stems from the presence of Chinese investor Tencent, which holds an estimated 5-6% stake in the company. Introduced in 2020, Press Note 3 mandates prior government approval for any investment from countries sharing a land border with India. However, sources familiar with the matter do not anticipate significant hurdles in securing this approval, given that Flipkart is majority-owned by a US-based parent.

Financial Performance and IPO Readiness

As Flipkart prepares for a public listing, it has sharpened its focus on improving operational efficiency and profitability. The company's financial performance reflects these efforts. In fiscal year 2025, Flipkart Internet reported a 14% year-on-year increase in revenue while successfully narrowing its net losses.

In May 2024, Flipkart closed a $1 billion funding round, which included a$350 million investment from Google, valuing the company at approximately $35-36 billion. In another sign of its IPO preparations, the company recently appointed former senior Meta executive Dan Neary to its board of directors.

Tax Implications and Industry Precedents

The process of a reverse flip can trigger significant tax liabilities, primarily from capital gains taxes incurred when shareholdings are transferred from an overseas entity to an Indian one. This has been a notable cost for other startups that have made a similar move. For instance, PhonePe, another Walmart-owned company, paid a substantial tax bill of around $1 billion to shift its domicile to India in 2022. Other companies like Meesho, Groww, and Razorpay have also incurred significant tax outlays to bring their legal bases back to India. Flipkart will have to weigh these near-term tax costs against the long-term strategic advantages of a domestic listing.

Conclusion: A Strategic Step Forward

The NCLT's approval for Flipkart's domicile shift is a pivotal step that clears a major legal hurdle on its path to an Indian IPO. While final government clearance is still pending, the move signals the company's firm commitment to listing on domestic exchanges. By simplifying its corporate structure and aligning its legal base with its primary market, Flipkart is strategically positioning itself to tap into India's growing capital markets and unlock its next phase of growth, with a potential public offering targeted for 2026.