New-age companies Meesho, Pine Labs and Zepto eyeing shift of base to India, says report

Payments player Pine Labs, is seeking approval for a cross-border merger involving its Singapore-based holding company and its Indian operations, as per the report. To this end it has initiated discussions with the National Company Law Tribunal (NCLT) and regulatory authorities in Singapore, it added.

The proposal, currently under consideration in Singapore, awaits an NCLT hearing in India later this month. Pine Labs, last valued at $5 billion, anticipates a favourable outcome from Singaporean authorities, which could set a precedent for similar moves by other companies.

Besides Pine Labs, Singapore-based quick delivery platform Zepto is another startup planning to relocate its headquarters to India. The company is in the advanced stages of filing a similar application, as per the report.

Sources told the paper that Zepto’s move has been in the pipeline for several months, with a focus on selecting the most tax-efficient option. Zepto is valued at $1.4 billion following a $200 million funding round last year.

Further, e-commerce platform Meesho is considering a fresh fundraising round to accommodate the additional tax obligations associated with relocating to India, the report said. The company is considering shifting its holding company from the US to India.

Meesho, Pine Labs and Zepto declined to comment on queries, the report added.

Tax Implications and Regulatory Landscape

The potential tax implications of these moves are a point of concern for the companies involved, sources told ET. Depending on the route chosen, these firms will have to navigate tax obligations in their current jurisdictions and in India, with the quantum determined by company valuations and third-party audits.

However, for fintech companies such as Pine Labs and others, regulatory frameworks in India are conducive to a return, further incentivising the relocation.

Notably, despite the tax considerations, the allure of higher valuations in the Indian market remains a significant driver for these transitions. Public markets in India tend to value technology ventures based on forward-looking revenue or EBITDA numbers, often at more favourable multiples compared to foreign markets.

This trend particularly benefits consumer brands and e-commerce firms with a strong presence and brand recall in India.

Several Indian-origin firms with foreign domiciles have sought legal advice and engaged with government officials, including Finance Minister Nirmala Sitharaman, on the matter, the report added.

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Published: 20 Mar 2024, 11:20 AM IST