The NCLT Approves Zepto's Reverse Flip into India

Nitin Konde, Varun Bhardwaj

Jan 14, 2025 — 3 min read

NCLT Approves Zepto’s Reverse Flip to India

The merger of Mumbai-based Kiranakart Technologies, the company behind the fast commerce platform Zepto, with its Singapore-based affiliate, Kiranakart Pte Ltd, has been accepted by the National Company Law Tribunal (NCLT). Zepto becomes an Indian firm after the NCLT order, and there is no resistance to the two companies' cross-border merger. Zepto is operated by Kiranakart Technologies Private Limited, an Indian firm, and Kiranakart PTE LTD, a Singaporean holding company. According to the NCLT ruling, Zepto will not need a no-objection certificate (NOC) from the Reserve Bank of India (RBI). According to the tribunal, the RBI has not objected, and an express NOC is not required because the Scheme of Arrangement is covered by Regulation 9 of the Cross Border Merger Regulations, which stipulates that the RBI's prior permission is presumed. According to the ruling, the scheme will also help the companies deal with better management, value consolidation, risk and policy management, competitive regulatory environments, and shareholder value creation.

Zepto Aims to Streamline its Group’s Structure with this Move

Zepto intends to simplify its group structure by lowering the number of legal entities in order to "optimise the legal entity structure" for improved business synergies, speedier decision-making, and substantial cost savings with the move of its holding company to Mumbai, India. This streamlined framework will help future fundraising efforts from Indian and international investors, according to the NCLT Mumbai bench. The judgement further stated that by switching to India, Zepto will be able to control risks, comply with local regulations, and directly align with the regulatory environment. By removing unnecessary administrative tasks and numerous record-keeping procedures, this action also seeks to streamline operations and drastically cut down on common management, administrative, and other costs. Zepto's preparations for an IPO in India later this year are anticipated to be accelerated by this development.

Within 30 days, Zepto is anticipated to formally finalise the transfer of its domicile to India. According to an earlier report by Inc42, Zepto, which is financed by Nexus, intends to reverse flip to India. According to people close to the business, Zepto wants to get into the reverse flipping queue with companies like Groww, Razorpay, Pine Labs, and Eruditus. However, many of these unicorns are being cautious and planning the most effective reverse flipping structure, much like PhonePe, whose tax liabilities went up to $900 million. The Mumbai bench of the NCLT noted in its January 9 ruling that the plan seems reasonable and fair and does not violate any legal provisions or public policy. Singaporean officials have also approved the merger.

Zepto Aiming for an IPO

In March or April of this year, the fast commerce platform hopes to submit its initial public offering (IPO) draft documents. Prior to going public, the company had already secured the required permits to move its headquarters from Singapore to India. Aadit Palicha and Kaivalya Vohra founded Zepto in 2021, and it presently uses a business-to-business (B2B) business model. Its parent company, Kiranakart Technologies, buys products straight from manufacturers and only distributes them to its licensee businesses, which include Commodum Groceries, Geddit Convenience, and Drogheria Sellers. Last year, Zepto made headlines when it raised an incredible $1.3 billion in capital and surpassed Blinkit and Swiggy Instamart in terms of revenue. At the moment, the rapid commerce unicorn is worth about $1.4 billion.