Meesho secures NCLT approval for reverse flip from US to India

E-commerce unicorn Meesho has received approval from India’s National Company Law Tribunal (NCLT) to demerge from its United States-based holding company, effectively clearing a crucial hurdle in its plan to relocate its headquarters back to India.

The Bengaluru-based startup had originally incorporated in Delaware, U.S., in 2016, a move typical of YC-backed Indian startups seeking easier access to global capital. That strategy, common among India’s new-age startups at the time, is now being reversed as more companies seek to list on Indian stock exchanges.

“The objections/observations to the scheme received from [the Registrar of Companies/Regional Director] and Income Tax Department have been adequately explained by the petitioner companies and hence there is no impediment in approval of the scheme,” the order read.

The tribunal’s approval allows Meesho to complete the second step of its reverse flip: merging the near-empty US holding company into its Indian arm. Once that merger is done, the company will be fully domiciled in India, clearing the way for its planned Diwali-season IPO.

“With the majority of our operations, including customers, sellers, creators and Valmo partners already based here, this step aligns our corporate structure with our day-to-day business footprint,” a Meesho spokesperson said.

The reverse flip, however, comes at a steep cost. Meesho is reportedly expected to pay up to $300 million in taxes to the U.S. government to complete the move—one of the largest tax outgoes for a startup flipping domicile, after PhonePe’s estimated $1 billion tax bill during its Singapore-to-India move in 2023.

Meesho follows other prominent startups such as Razorpay, PhonePe, Groww and Zepto in relocating to India. The trend reflects the growing maturity of Indian capital markets and a push by regulators and investors for companies with substantial operations in India to be domiciled locally.

The company is expected to file its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) in the coming weeks. It aims to raise up to $1 billion through its IPO, at a potential valuation of $10 billion, according to earlier reports.

In preparation, Meesho has already transitioned into a public limited company and closed a $550 million funding round earlier this year, bringing in investors including Tiger Global, Mars Growth Capital, and Think Investments. While much of that round was secondary, it valued the company at around $3.9 billion—slightly below its earlier peak of $5 billion.

The company has appointed Kotak Mahindra Capital, Citi, JP Morgan and Morgan Stanley as lead bankers for the public issue. Meesho’s move comes as part of a broader reshaping of India’s startup ecosystem, as several companies, including Flipkart and Groww, prepare to go public on Indian bourses, many of them utilizing SEBI’s confidential filing route.