Reverse Flip to India: Legal Process, Approvals & Timeline
Authored by - Adv. Pranay Sawant, Senior Executive at Outsource360
On 9 April 2025 the National Company Law Tribunal at Chandigarh sanctioned the scheme merging Pine Labs' Singapore parent into its Indian subsidiary, the Indian half of a reverse flip to India. That same order changed one date. The scheme was to count from the day its last condition was met; the order made it the date of the order itself.
The Singapore company, which held 99.89% of the Indian one, had approved the plan on 13 December 2023 and the Indian board on 8 February 2024. It was one scheme under section 210 read with section 212 of Singapore's Companies Act 1967 and sections 230 to 232 read with section 234 of India's Companies Act, 2013.
Singapore moved first. The parent's shareholders approved on 22 April 2024 and the High Court sanctioned the scheme on 9 May 2024. India's first application had gone in on 17 February 2024; the Tribunal's first order, on 12 August, directed notices to the regulators and meetings of shareholders and unsecured creditors, and the petition for sanction followed on 10 October.
Pine Labs ran a payment system, so the Reserve Bank reviewed the change of control as its regulator. The company first obtained the Government approvals that Press Note 3 (2020) requires for land-border investment, and on 9 January 2025 the RBI wrote that it had no objection.
By the time the Tribunal ruled, Singapore's court had been done for 335 days. The company appealed the changed date, and on 1 May 2025, 22 days later, the National Company Law Appellate Tribunal restored the scheme's own definition (Company Appeal (AT) No. 93/2025). It noted that the Regional Director had raised no objection, that no reasons were given and that the change would have "serious financial implications".
The last conditions were met on 6 June 2025, and the scheme took effect that day. The Singapore company was dissolved without being wound up, its subsidiaries became the Indian company's, and its shareholders became shareholders of Pine Labs in India. With the parent's shares cancelled, the company recorded that it no longer had an identifiable promoter.
Nineteen days later, on 25 June 2025, it filed its draft red herring prospectus with SEBI. Two requests tied to the scheme's shares failed: in April 2025 SEBI wouldn't let equity from converted scheme preference shares be sold in the offer, and in September 2025 it wouldn't release employees' scheme shares from lock-in.
In India the scheme had taken 417 days from first filing to sanction, and 475 to the day it took effect. The share offer opened on 7 November 2025, 154 days after that.
Pine Labs took one of four roads home. A reverse flip to India can run through a fast-track merger confirmed by a Regional Director, a Tribunal scheme like this one, a share swap or a share purchase. Each sets off its own approvals in India and abroad, its own clock and, for a Delaware parent, a US tax bill.
A reverse flip to India is the move of a start-up group's parent company from abroad to India, so that the Indian operating company ends up at the top. Indian company law has no route for a foreign company to re-register in India, so the flip is done by a merger, a share swap or a share purchase.
Below: the four ways of reverse flipping to India, the fast-track and Tribunal procedures, the parent's home-country rules, every approval in order, the statutory clock, the tax on both sides and what moves with the company.
On this page
What a reverse flip to India is, and the four ways to do it
The fast-track reverse flip: merging the foreign parent into its Indian subsidiary
When a reverse flip to India needs the Tribunal under section 234
Reverse flip by share swap or share purchase under FEMA
The other side of the border: Delaware, Singapore, the UK, Mauritius and Cayman
Every approval and filing in a reverse flip to India, in order
How long does a reverse flip to India take?
Reverse flip tax implications in India, the US, Singapore and the UK
What moves with the company: ESOPs, investor rights, IP and the IPO runway
Frequently asked questions about reverse flipping in India
What a reverse flip to India is, and the four ways to do it
A reverse flip to India puts the Indian operating company at the top of the group in place of its foreign holding company. Because the Companies Act, 2013 has no inward re-domiciliation, the foreign parent cannot simply re-register in India: it merges into the Indian company, or its shareholders swap or buy their way into Indian shares.
The four routes side by side
In India the four routes compare like this, as at 12 October 2026:
Route | How it works | Who approves in India | Fits when | Indian tax on the exchange |
Fast-track merger | The foreign parent merges into its Indian subsidiary under section 233 | The Regional Director, after members and creditors of both companies approve | The parent owns 100% of the Indian company | No capital gains tax if the amalgamation test is met |
Tribunal merger | The same merger, by a scheme under sections 230 to 232 read with section 234 | The National Company Law Tribunal | Anyone else holds Indian shares, or the scheme does more than one thing | No capital gains tax if the amalgamation test is met |
Share swap | Holders swap parent shares for new Indian shares; the parent then closes | No scheme; Government approval only where a sector or investor needs it | Speed matters more than the tax exemption | Capital gains tax: no amalgamation exemption |
Share purchase | Indian shares are bought from the parent, or the parent's investors are bought out | No scheme; FEMA pricing and reporting where a resident buys | The parent's stake can pass to its investors directly | Capital gains tax on the seller |
Sources: Companies Act, 2013, sections 230, 233 and 234; Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, rules 25 and 25A; Income-tax Act, 2025, sections 2(6) and 70.
A merger (the FEMA rules call it an inbound merger) moves everything the parent owns, including its foreign subsidiaries, contracts and liabilities, into the Indian company under the scheme, and it can be tax-neutral in India; a swap or a purchase moves only shares. In a swap or a purchase the old parent survives the deal, and any closure is a separate step under its own law.
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Between the two merger routes the test is ownership: a foreign parent that wholly owns its Indian subsidiary can take the fast-track, while any outside shareholder in the Indian company sends the scheme to the Tribunal.
Why start-ups flipped out, and why they are coming home
Why did start-ups leave in the first place? The Economic Survey 2022-23 described flipping as moving the ownership of an Indian company, with its IP and data, to an overseas entity, usually at an early stage and "driven by commercial, taxation and personal preferences of founders and investors". The same passage said that easier access to Indian venture capital, changes to the round-tripping rules and India's maturing capital markets had slowed flipping, and that companies were exploring reverse flipping to India.
Since then the pull has been listing: Groww, Pine Labs and Meesho opened Indian share offers in late 2025, though no government body counts reverse flips. Flipping back isn't the only way to list: Capillary Technologies filed to list its Indian company with its Singapore parent as a promoter, and since January 2024 an unlisted Indian public company may list directly on GIFT City's exchanges.
Re-registration may come later, and only into an International Financial Services Centre. On 3 August 2026 the Joint Committee on the Corporate Laws (Amendment) Bill, 2026 recommended a new Chapter XXIIA for it, citing "reverse-flipping". But that isn't in the Bill or law.
The fast-track reverse flip: merging the foreign parent into its Indian subsidiary
Since 17 September 2024 a foreign holding company can merge into its wholly owned Indian subsidiary through the section 233 fast-track, the route with the shortest statutory clock for a reverse flip to India. A Regional Director, not the Tribunal, confirms the scheme. But the parent's home country still has to let it merge out.
Who qualifies: a wholly owned subsidiary and 90% approval on both sides
Rule 25A(5) of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, inserted by G.S.R. 555(E), covers a foreign holding company merging into "a wholly owned subsidiary company incorporated in India": both "shall obtain the prior approval of the Reserve Bank of India", and the Indian company files under section 233. A second amendment, G.S.R. 603(E) of 4 September 2025, added the case to the fast-track list in rule 25(1A) as clause (vi), by reference to rule 25A(5), which stays in force with its conditions. That RBI approval needs no application, though: under regulation 9(1) of the FEMA (Cross Border Merger) Regulations, 2018, a merger done in line with them "shall be deemed to have prior approval of the Reserve Bank", backed by a compliance certificate filed with the application.
Section 233 then needs approval from members holding at least 90% of the total number of shares and creditors holding nine-tenths in value, in both companies, so a parent with a long tail of investors must reach 90% of all its shares, not of votes cast. The pending Corporate Laws (Amendment) Bill, 2026 would cut these to a majority of members present and voting holding 75% in value, and three-fourths of creditors; it isn't law.
Does that make the fast-track compulsory? Rule 25A(5) says the Indian company "shall comply with" section 233, which points this case to the Regional Director, while rule 25(8) lets companies choose the Tribunal. The rules don't say which prevails, and Zepto, wholly owned from Singapore, chose the Tribunal in October 2024.
The fast-track steps, forms and the Regional Director's clock
Here is the fast-track reverse flip process in order, as at 12 October 2026:
Both boards approve the scheme with a registered valuer's report, and Government approval is sought for any land-border investor.
Notice goes in Form CAA-9 to the Registrar, the Official Liquidator, affected persons and any sectoral regulator of a party, with 30 days to object.
The declaration of solvency is filed in Form CAA-10 through Form GNL-1 before the meetings are called.
Members of both companies holding 90% of the total number of shares approve the scheme in general meeting, after considering the objections.
Creditors of both companies holding nine-tenths in value approve at a meeting on 21 days' notice, or in writing.
Within 15 days of the meetings, the Indian company files Form CAA-11 with Form RD-1, attaching the scheme, the results, the valuer's report and the FEMA compliance certificate, with copies to the Registrar and the Official Liquidator.
The Regional Director confirms the scheme in Form CAA-12 or refers it to the Tribunal; with neither in 60 days, a confirmation order issues anyway.
The Indian company files the confirmation in Form INC-28 within 30 days, and the parent completes its exit under its own law.
Since 15 June 2023 (G.S.R. 367(E)) the Regional Director has worked to a clock: with no objections, confirmation is due within 15 days after the 30-day objection window. With neither an order nor a Tribunal reference within 60 days of receipt, a confirmation order issues anyway. That deemed confirmation is the Regional Director's, under rule 25; the Reserve Bank's deemed approval under regulation 9 is a separate mechanism, and neither replaces the other.
Fair warning: section 233 treats the transferor as dissolved once the scheme is registered. But in a reverse flip to India the foreign parent's existence ends only under its own law (by a Delaware certificate of merger or a Singapore court order), so the two legs must be timed together. Added together and run in full, the fast-track's windows come to roughly three months, which the timeline section sets against the Tribunal's.
When a reverse flip to India needs the Tribunal under section 234
A reverse flip to India goes to the National Company Law Tribunal whenever the fast-track is closed or unsuitable: the Indian company has another shareholder, the scheme does more than one merger, or the votes can't reach the fast-track's bar. Section 234 then applies the ordinary scheme procedure to this inbound merger, with a few additions.
The cases the fast-track cannot take
So which flips can't use the fast-track? Rule 25A(1) lets a foreign company merge into an Indian company with the Reserve Bank's prior approval after complying with sections 230 to 232, and that's the route whenever anyone besides the parent holds Indian shares, such as an ESOP trust, an angel or a founder holding directly. Pine Labs is typical: its Singapore parent held 99.89% of the Indian company, and the Tribunal ordered meetings of the Indian company's shareholders and unsecured creditors.
A scheme that does several things at once usually runs there too: Meesho's paired its Delaware parent's merger with two demergers inside India, all sanctioned by one order of 27 May 2025. Creditors' meetings can be dispensed with where creditors holding 90% in value agree by affidavit. On 4 September 2025 the appellate tribunal dropped the unsecured creditors' meetings the Tribunal had ordered in a Singapore holding company's scheme (Company Appeal (AT) No. 171 of 2025).
What section 234 adds to an ordinary merger scheme
Section 234 applies the Tribunal procedure for compromises and amalgamations to a merger with a foreign company "mutatis mutandis", so the meetings, notices and sanction follow the ordinary scheme procedure under sections 230 to 232, covered in our mergers guide. It adds that the scheme may pay the parent's shareholders in cash, in depository receipts or partly in each. But cashing out holders of more than a quarter of the parent's share value breaks the Indian tax exemption.
Notices go to the Central Government, the Registrar and the income-tax authorities and, where relevant, the Reserve Bank, SEBI, the Competition Commission and sectoral regulators, who have 30 days from receipt to make representations, failing which none are presumed. In practice the Reserve Bank, served with notice of Groww's and Zepto's schemes, raised no objection, and the Tribunals accepted the deemed approval even though in Groww's case the Regional Director had asked for an RBI no-objection certificate.
Here's the thing: the foreign leg runs in parallel under the parent's own law, so the two orders must match. Define the appointed date so it works in both places, because, as Pine Labs' case showed, a Tribunal order can alter it.
Reverse flip by share swap or share purchase under FEMA
Reverse flipping in India without a merger means the parent's shareholders take Indian shares directly, either by swapping their holdco shares for new Indian shares or by buying Indian shares. No scheme or Tribunal is involved. But the foreign exchange rules, the tax and the old parent's closure all have to be handled separately.
How a share swap works under the NDI and overseas investment rules
Since August 2024 the FEMA non-debt instrument rules have allowed Indian shares to be issued or transferred against a "swap of equity capital of a foreign company" (with prior Government approval wherever that applies), so the holdco's shareholders can be paid in Indian shares. The swap needs a valuation, whatever its size, by a SEBI-registered merchant banker or an investment banker registered abroad, on top of the registered-valuer and FEMA pricing reports a flip already needs.
On the other leg the Indian company acquires the foreign holdco, which is overseas investment: both legs must comply with FEMA, and the Indian company reports its financial commitment in Form FC. That leaves a circle, with the holdco now a subsidiary while still holding shares in its new Indian parent, so swap plans usually end by merging or liquidating the holdco.
Buying the Indian shares directly, and closing the old parent
PhonePe moved this way. On 23 December 2022 its Singapore parent transferred most of its shares in the Indian company to other entities and individuals, cutting its stake from 100% to 7.28%, and the board and shareholders' agreement moved to the Indian company the same day. A transfer of Indian shares between a non-resident and a resident is reported in Form FC-TRS within 60 days of the transfer or of the payment, whichever is earlier.
Why go this way at all? The appeal of both routes is speed and simplicity, with no scheme, meetings or sanction; the price is tax, because neither gets the exemption a merger-route reverse flip to India enjoys. Either way the old parent survives as a shell or minority holder, and any closure happens under its own law, covered country by country in the next section.
The other side of the border: Delaware, Singapore, the UK, Mauritius and Cayman
Every reverse flip to India has a second, foreign leg, and the parent's home country decides what is possible. Delaware lets its company merge straight into the Indian company, Singapore needs a court scheme or a swap, and the UK has no merger route at all. For a Mauritius or Cayman parent, one rule decides it.
Which route each home country allows, starting with Delaware
What each common holding-company home allows, as at 12 October 2026:
Parent's home | Can it merge straight into the Indian company? | Route used for reverse flips | How the old parent ends |
Delaware (US) | Yes, under section 252 or section 253 | A section 253 merger alongside an Indian scheme | It ceases to exist on the merger, after its franchise tax is paid |
Singapore | Not by statutory amalgamation; yes by a court scheme under sections 210 and 212 | A court scheme alongside an Indian scheme, or a swap or purchase | Dissolved without winding up by the court order, or struck off after a swap |
United Kingdom | No: its EEA-only cross-border merger regime ended on 31 December 2020 | A share-for-share exchange into the Indian company | Struck off or liquidated after the exchange |
Mauritius | No verified merger route, and its transfer of registration out needs a receiving country, which India is not | A swap or purchase | Closed under Mauritius law after the swap |
Cayman Islands | Yes, under section 237, into an overseas company that survives | A section 237 merger alongside an Indian scheme (no verified flip example) | Struck off by its Registrar under section 237 |
Sources: Delaware Code, Title 8, sections 252 and 253; Singapore Companies Act 1967, sections 210, 212 and 215A; UK Cross-Border Mergers Regulations 2007; Mauritius Companies Act 2001; Cayman Companies Act.
Groww and Meesho both used section 253 of Delaware's corporation law, under which a parent owning at least 90% of each voting class of a subsidiary's stock merges into it on a majority vote of its outstanding stock after 20 days' notice. Their certificates are dated 28 March 2024 and 20 June 2025. A section 253 merger gives the parent's stockholders no appraisal rights, unlike the general foreign-merger route in section 252, where dissenters can ask the Court of Chancery for fair value.
What happens to the parent's debts? They attach to the Indian survivor under section 259, which is how its US tax bill becomes the Indian company's. Delaware asks a company ending its existence to file its annual report and pay all franchise tax first, and its merger filing fee is USD 259 under the fee schedule revised on 1 August 2026.
Singapore court schemes, UK share exchanges and the offshore hubs
Singapore's statutory amalgamation covers only Singapore companies and its transfer-of-registration rules work only inward, so a Singapore parent leaves by a court scheme under section 210 read with section 212, which can vest its business in a foreign company and dissolve it without winding up. The scheme needs a majority in number holding three-fourths in value of those voting, the court's sanction, and lodgement of the order with the Registrar within seven days. A swap or purchase is the alternative, followed by a strike-off under section 344A, which can't complete until 60 days after a Gazette notice.
The UK's EEA-only cross-border merger regime ended on 31 December 2020, and a Part 26 scheme vests an undertaking only in a UK company. Instead, a UK parent's holders swap into the Indian company, and the UK company is struck off, at least two months after its Gazette notice, or liquidated.
Mauritius lets a company move its registration abroad under sections 301 to 307 of its Companies Act 2001, but only to a country that will receive it, so a reverse flip to India from Mauritius usually runs through a swap or purchase. Cayman lets its companies merge into an overseas company that survives (section 237 of its Companies Act), subject to its Registrar's conditions, so a Cayman parent can take the merger route.
Every approval and filing in a reverse flip to India, in order
A merger-route reverse flip to India collects approvals in two countries before it takes effect, then starts Indian filings. Most Indian approvals are deemed or exempt if the scheme is built well; land-border Government approval, a regulator's consent and the foreign leg have no Indian statutory clock.
Approvals before the merger or swap takes effect
For a merger-route flip, the approvals usually come in this order, as at 12 October 2026:
Step | Approval | Who gives it | Clock |
1 | Board approvals, valuation and the FEMA compliance certificate | Both companies' boards; a registered valuer | None set by law |
2 | Government approval for a land-border investor, or DPIIT reporting below the threshold | Central Government; DPIIT | No statutory approval clock; report before the shares issue |
3 | Form CAA-16, only if the parent is incorporated in a land-border country | Filed with the application | At filing |
4 | Competition clearance, unless an exemption applies | Competition Commission of India | Only if notifiable |
5 | Change-of-control approval, if the Indian company is regulated | Its regulator, such as the RBI for a payment system | Set by the regulator |
6 | Objections or representations on the scheme | Registrar, Official Liquidator, tax and other authorities | 30 days |
7 | Shareholder and creditor votes | Members and creditors in India; the parent's holders under its own law | Fast-track: 90% of total shares, nine-tenths in value of creditors; Tribunal: three-fourths in value of those voting |
8 | Foreign-side approval | Delaware filing, Singapore court or other home authority | Set by foreign law |
9 | Reserve Bank approval under FEMA | Deemed if the cross-border merger regulations are followed | None |
10 | Sanction | Regional Director or Tribunal | Regional Director: deemed at day 60 unless referred; Tribunal: no binding deadline |
Sources: Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, rules 25 and 25A; FEMA (Cross Border Merger) Regulations, 2018, regulation 9; Competition (Criteria for Exemption of Combinations) Rules, 2024.
Investors from a land-border country (or with beneficial owners there) need Government approval under Press Note 3 (2020), as amended by Press Note 2 (2026), and smaller land-border holdings are reported to DPIIT before the shares are issued. Our FDI guide explains how the March 2026 land-border change works. Competition approval is a check: most flips fit the small-target exemption or the intra-group exemption for mergers that change no control (accepted for Flipkart's scheme in October 2025). But a deal valued above Rs 2,000 crore falls outside the first.
So is the RBI out of the picture? Not quite. Deemed RBI approval covers only foreign exchange: a regulated Indian company still needs its own regulator's change-of-control approval, and since September 2025 a fast-track notice also goes to a regulated party's sectoral regulator, such as the RBI, SEBI, IRDAI or PFRDA. Pine Labs needed both: Government approvals under Press Note 3 (2020) and the RBI's no-objection as its payment-system regulator.
Filings, FEMA clocks and stamp duty after the order
Within 30 days of receiving the order, the Indian company files it with the Registrar in Form INC-28; on the Tribunal route a default costs Rs 20,000 plus Rs 1,000 a day, up to Rs 3 lakh (section 232(8)). Shares issued to the old parent's non-resident holders are reported in Form FC-GPR on the RBI's FIRMS portal within 30 days of issue; there's no separate merger return, and Form CN covers convertible notes.
The cross-border merger regulations give two years to make the parent's foreign borrowings and guarantees conform to India's FEMA rules, with no repayment from India meanwhile, to sell foreign assets an Indian company may not hold, and to close any merger bank account abroad. Notification FEMA 389(1)/2026-RB, dated 29 May 2026 and in force from its publication in the Gazette, which the RBI dates 5 June 2026, replaced "NCLT" with "Competent Authority", so the sanction-dated clocks plainly run from a Regional Director's confirmation too.
The parent's foreign subsidiaries become the Indian company's overseas investments, with yearly performance reports due by 31 December under the overseas investment rules that now govern those subsidiaries; Groww disclosed a delayed Form FC for one inherited Singapore investment. Indian-resident founders who held holdco shares as overseas direct investment report the disinvestment within 30 days of receiving proceeds.
State stamp duty can fall on the order itself: Maharashtra's Article 25(da) charges both a Tribunal order and a Regional Director's confirmation, on its words at up to 0.7% of the market value of the shares issued plus any consideration where the parent owns no Maharashtra property. Elsewhere, check the State where the Indian company is registered. Official fees are small beside tax and stamp duty: Rs 5,000 to apply to the Tribunal, plus the prescribed MCA fee on each form filed.
How long does a reverse flip to India take?
No official end-to-end timeline exists for a reverse flip to India. If each statutory window runs in full, a fast-track merger takes about 90 to 105 days from the notice to the Regional Director's order, before preparation and foreign steps; on the Tribunal route, five recent schemes took 87 to 417 days from first filing to sanction.
The statutory clock, route by route
Here are the main periods the law sets on each route, as at 12 October 2026:
Step | Fast-track (Regional Director) | Tribunal (NCLT) |
Objections from authorities | 30 days from the notice | 30 days from receipt of notice |
Shareholder and creditor meetings | Creditors on 21 days' notice, or in writing | Notice at least one month ahead; posted online 30 days ahead |
Filing after the meetings | Scheme and valuer's report within 15 days | Petition within 7 days of the chairperson's report |
Decision | By day 45 or 60 after filing; deemed at day 60 unless referred | Hearing advertised 10 days ahead; no binding deadline for the order |
Order filed with the Registrar | 30 days, Form INC-28 | 30 days, Form INC-28 |
Shares to non-residents reported | 30 days, Form FC-GPR | 30 days, Form FC-GPR |
FEMA clean-up abroad | Two years | Two years |
Statutory windows in full | About 90 to 105 days from notice to order | About seven weeks from directions to hearing |
Real examples (case records) | None dated yet | 87 to 417 days from first filing to sanction, in five schemes |
Sources: Companies Act, 2013, sections 230 to 233; Companies (Compromises, Arrangements and Amalgamations) Rules, 2016; FEMA (Cross Border Merger) Regulations, 2018; RBI Master Direction on reporting under FEMA.
Added up, the fast-track windows come to 30 days for objections, up to 15 days to file after the meetings and 45 to 60 days for the Regional Director, so roughly 90 to 105 days from notice to order, plus 30 days to file it. These are statutory windows, not forecasts: they leave out preparing the scheme and valuation, the foreign leg, any land-border approval and any competition review, which run to their own timetables.
The Tribunal route's fixed periods cover only the stretch from its directions to the sanction hearing: about seven weeks. And everything else? That depends on when the bench lists and decides the case.
What real reverse flips took, from case records and offer documents
The quickest on record is Zepto's: its first application reached the Tribunal at Mumbai on 14 October 2024, and the scheme was sanctioned on 9 January 2025, 87 days later. Singapore's High Court followed on 27 January, and the scheme took effect on 4 February 2025. At Bengaluru, Groww's scheme took 339 days from first filing to sanction and Meesho's 392; Flipkart's (filed there but decided by the Principal Bench in New Delhi on 12 December 2025) took 204 days but could take effect only once Singapore's courts had acted.
With Pine Labs' 417 days, these five cases of reverse flipping to India ran from 87 to 417 days between first filing and sanction, and the four with a recorded effective date took effect 1 to 58 days after sanction. No offer document yet dates a fast-track flip: Dream Sports and Razorpay were reported in 2025 to have used the Regional Director route, but their dates come only from the press and aren't a benchmark.
IPO filings followed at very different speeds: Meesho filed 11 days after its merger took effect, Pine Labs 19 days after and Groww 421 days after.
Reverse flip tax implications in India, the US, Singapore and the UK
The tax implications of a reverse flip to India depend on the route and where the parent sits. In India a qualifying merger is tax-neutral for the parent and every shareholder, while a swap or purchase gets no exemption; abroad, the largest bill falls on a Delaware parent, which owes US tax on the way out.
India: when the merger is tax-neutral, and which Income-tax Act applies
In a merger, the parent's transfer of assets is exempt under section 70(1)(e) of the Income-tax Act, 2025 (erstwhile section 47(vi) of the Income-tax Act, 1961) because the amalgamated company is Indian. Each shareholder's exchange is exempt under section 70(1)(f) of the Income-tax Act, 2025 (erstwhile section 47(vii) of the Income-tax Act, 1961), with no residence condition. Both exemptions need an "amalgamation" under section 2(6) of the Income-tax Act, 2025, whose clause (c) requires holders of at least three-fourths in value of the parent's shares to become shareholders of the Indian company, so cash-outs above a quarter break it for everyone.
A swap or purchase gets none of this: non-residents can be taxed where the holdco's Indian assets exceed Rs 10 crore and are at least half its assets (section 9(10) of the Income-tax Act, 2025). The Indian company must also report the deal or face a penalty of 2% of its value where control passes (sections 506 and 458 of the Income-tax Act, 2025).
The Indian company's losses are at risk: section 119(3) of the Income-tax Act, 2025 (erstwhile section 79 of the Income-tax Act, 1961) needs 51% continuity of beneficial voting power, and its carve-out in sub-section (4)(b) covers only foreign-to-foreign mergers and demergers, though unabsorbed depreciation isn't caught. Rulings split on whether changing the immediate shareholder within a group breaks that test (Delhi High Court, 13 January 2016, ITA 349/2015, yes; Delhi tax tribunal, 26 November 2025, ITA No. 5826/Del/2024, no), with no Supreme Court ruling, so model the losses as at risk.
Which Act applies? It follows the tax year of the transfer, for a scheme its appointed date (Supreme Court, 5 April 2022): an appointed date on or before 31 March 2026 keeps the Income-tax Act, 1961 through section 536 of the Income-tax Act, 2025, even if sanction comes later. Any later appointed date brings in the 2025 Act. A swap or purchase follows the date the shares change hands; the exemptions read the same in both Acts, so the switch changes section numbers, not the answer, and Groww, Pine Labs and Meesho all fell under the 1961 Act.
The US bill on a Delaware parent, and the Singapore and UK position
A reverse flip to India from Delaware is a taxable exit for the parent: section 367(a)(4) of the Internal Revenue Code (formerly 367(a)(5)) and Treasury Regulation 1.367(a)-7 deny tax-free treatment to its outbound transfer. The parent pays 21% on the built-in gain in its assets, mainly the Indian shares, a bill the Indian survivor inherits. Groww booked an estimated Rs 13,396.84 million for this "Outbound" merger tax and disclosed an IRS claim of USD 5.54 million; Meesho showed Rs 25,590.71 million of tax payable on its business combination at 30 September 2025, Rs 17,585.69 million of it US tax on global intangible low-taxed income.
US shareholders are generally not taxed under section 367 in a qualifying merger, but in a share swap they are unless US holders end up with 50% or less, 5% holders sign five-year gain recognition agreements and the control-group and active-business tests are met. The anti-inversion rule in section 7874 would treat the Indian company as American, because ownership barely changes, unless the group passes the 25% substantial-business-activities test in India, which an India-run group usually does.
Singapore has no general capital gains tax and its section 13W share-gain exemption is permanent from 1 January 2026, but section 10L can tax gains on foreign assets (such as Indian shares) received in Singapore by a holdco without substance there; its reach to a cross-border scheme is untested. UK holders exchanging shares can defer the gain under section 135 of the Taxation of Chargeable Gains Act 1992. But for share issues from 26 November 2025 the Finance Act 2026 asks whether avoiding tax was a main purpose; HMRC answers clearance requests within 30 days.
What moves with the company: ESOPs, investor rights, IP and the IPO runway
A reverse flip to India moves more than shares: option plans, investor rights, trademarks, contracts and foreign subsidiaries all have to land in the Indian company, and the flip's date decides who can sell in its IPO. Most of it follows the scheme by law; registers and regulators lag behind.
ESOPs, investor rights and the shareholders' agreement
For a listed company, SEBI's share-based benefit rules make the scheme say how options are treated, on terms not prejudicial to employees, and count time under the parent's options toward the one-year minimum vesting (regulations 9(8) and 18(1)). Before listing, the Indian company's replacement plan runs under section 62(1)(b) of the Companies Act, 2013 and rule 12 of the share capital rules, and our guide explains how ESOP plans work before and after listing.
In Pine Labs' flip the parent's option holders received options under a new Indian plan "on terms no less favourable", yet SEBI refused to release the shares employees had received under the scheme from the IPO lock-in. On the text of section 17(1)(d) of the Income-tax Act, 2025, swapping options isn't itself a taxable perquisite; tax arises when the replacement option is exercised and shares are allotted.
And investor rights? They don't cross by themselves: the shareholders' agreement and articles are rewritten for the Indian company, though offer documents carry over investors' acquisition price from the parent's shares.
Trademarks, contracts, foreign subsidiaries and the listing rules
Registers lag the law after a reverse flip to India: Groww's wordmark passed to the Indian company under the scheme. But its transfer was still pending at the Trade Marks Registry in its prospectus, and Meesho's new licences, registration updates and contract novations were still in progress.
SEBI's IPO rules let shares received under a court-, Tribunal- or Central Government-approved scheme, in lieu of a business and capital that existed for more than a year before its approval, be sold in the offer without the usual one-year holding (regulation 8 of its ICDR Regulations). From 9 September 2025 that also covers equity arising from fully paid compulsorily convertible securities received under a scheme, the point SEBI had refused Pine Labs in April 2025, and SEBI's board papers named reverse flips as the reason. On the regulation's words, a scheme confirmed by a Regional Director, who exercises the Central Government's power, qualifies, but a contractual swap doesn't, so swap shares need a full year before the draft prospectus.
Scheme shares also stay eligible for the promoters' minimum contribution (regulation 15), and preference shares received in the flip must convert by the red herring prospectus (regulation 5(2)). Founder-employees named as promoters keep options granted at least a year before the draft offer document is filed (regulation 9A of the SBEB Regulations, from 8 September 2025); whether a grant by the old parent counts from its original date, regulation 9A doesn't say.
Frequently asked questions about reverse flipping in India
What is the difference between flipping and reverse flipping?
The Economic Survey 2022-23 described flipping as moving ownership of an Indian company, with its IP and data, to an overseas entity, usually at an early stage. Flipping back reverses that: the Indian company returns to the top through a merger, a share swap or a share purchase.
Can a Delaware or Singapore company simply re-register in India?
No. As at 12 October 2026 the Companies Act, 2013 has no inward re-domiciliation, so a flip is a merger, a swap or a purchase. In August 2026 a Joint Committee recommended allowing it, but only into an IFSC; that is not in the Bill and is not law.
Which Indian start-ups have already completed a reverse flip?
Groww, Meesho and Pine Labs merged their foreign parents into Indian companies before their IPOs, Zepto's merger took effect on 4 February 2025 and PhonePe moved by share transfers. Flipkart's scheme was sanctioned in December 2025; Dream Sports and Razorpay are reported to have flipped.
Can a foreign parent merge into its Indian subsidiary without the NCLT?
Yes, if it wholly owns the subsidiary: since 17 September 2024 rule 25A(5) points the Indian company to the section 233 fast-track before a Regional Director. Rule 25(8) lets companies opt for the Tribunal, the rules don't say which prevails, and Zepto, wholly owned from Singapore, did.
Is the fast-track open if the parent owns less than 100%?
No. The fast-track covers a foreign parent merging into its wholly owned Indian subsidiary, so any outside shareholder in the Indian company, such as an ESOP trust, an angel or a founder holding directly, sends the scheme to the Tribunal under rule 25A(1).
Can a company with a Chinese or other land-border investor flip back to India?
Yes. Land-border investors, or those with beneficial owners there, need Government approval under Press Note 3 (2020), smaller holdings are reported to DPIIT, and cashing out a blocked holder can cost the tax exemption. Form CAA-16 applies only to a parent incorporated in a land-border country.
Does a reverse flip need RBI approval?
Under FEMA it is deemed: a merger that follows the cross-border merger regulations has the RBI's prior approval under regulation 9(1), with a compliance certificate filed alongside. A regulated Indian company still needs its own regulator's change-of-control approval.
What happens to the old foreign parent after the flip?
It ends under its own law, not by the Indian order. A Delaware parent ends through its certificate of merger and a Singapore parent through its court's order; after a swap or purchase, a parent that is closed is struck off or liquidated in its home country.
What does a reverse flip to India cost?
Official fees are small: Rs 5,000 to apply to the Tribunal, plus the prescribed MCA fee on each form. State stamp duty can fall on the order, and the largest costs are usually tax, above all a Delaware parent's US exit tax.
How soon after a reverse flip can a company file for an IPO?
Meesho filed 11 days after its merger took effect, Pine Labs 19 days after and Groww 421 days after. Regulation 8 of SEBI's ICDR Regulations lets qualifying scheme shares be sold without the one-year holding, extended in September 2025 to converted securities; swap shares wait a year.
Is a share swap or a merger better for reverse flipping in India?
A merger can be tax-neutral in India if holders of three-fourths in value of the parent's shares become shareholders of the Indian company. A swap or purchase is faster, with no scheme or sanction, but it can be taxable and gets no amalgamation exemption.
Is a flip from Singapore cheaper in tax than one from Delaware?
It depends on the facts. A Delaware parent pays US tax at 21% on its built-in gain when it merges out; Singapore has no general capital gains tax, but whether section 10L of its Income Tax Act 1947 reaches a cross-border scheme is untested.
Do the parent's shareholders pay Indian tax on the merger?
Not if the merger is an amalgamation. Section 70(1)(f) of the Income-tax Act, 2025 (erstwhile section 47(vii) of the Income-tax Act, 1961) exempts each holder paid in Indian shares, resident or not, if holders of three-fourths in value of the parent's shares join the Indian company.
What happens to employee stock options in a reverse flip?
A merger scheme sets their treatment: Pine Labs' holders got Indian options "on terms no less favourable". Once listed, SEBI requires terms not prejudicial to employees and credits time under the old options; on the text of the Income-tax Act, 2025, tax arises at exercise.
Can the Indian company keep its tax losses after the flip?
Possibly not. Section 119 of the Income-tax Act, 2025 (erstwhile section 79 of the Income-tax Act, 1961) needs 51% continuity of beneficial voting power and has no carve-out for this case; rulings are split and unabsorbed depreciation is not caught, so model the losses as at risk.
References
India: company law, listing rules and Parliament (Parliament of India via India Code; Ministry of Corporate Affairs via the Gazette of India; Lok Sabha).
Companies Act, 2013, section 230 (power to compromise or make arrangements), Parliament of India (India Code).
Companies Act, 2013, section 232 (merger and amalgamation of companies), Parliament of India (India Code).
Companies Act, 2013, section 233 (merger or amalgamation of certain companies, the fast-track), Parliament of India (India Code).
Companies Act, 2013, section 234 (merger or amalgamation of a company with a foreign company), Parliament of India (India Code).
Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, Ministry of Corporate Affairs (India Code).
G.S.R. 367(E), amending rule 25 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (in force 15 June 2023), Ministry of Corporate Affairs (India Code).
G.S.R. 555(E), 9 September 2024, inserting rule 25A(5) (in force 17 September 2024), Ministry of Corporate Affairs (Gazette of India).
G.S.R. 603(E), 4 September 2025, Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025, Ministry of Corporate Affairs (Gazette of India).
G.S.R. 61(E), 24 January 2024, Companies (Listing of equity shares in permissible jurisdictions) Rules, 2024, Ministry of Corporate Affairs (Gazette of India).
Corporate Laws (Amendment) Bill, 2026 (Bill No. 85 of 2026, as introduced), Lok Sabha.
India: tribunal and court decisions (via Indian Kanoon).
India: foreign exchange and foreign investment (Reserve Bank of India; Department for Promotion of Industry and Internal Trade).
Foreign Exchange Management (Cross Border Merger) Regulations, 2018, Reserve Bank of India.
Notification FEMA 389(1)/2026-RB, Foreign Exchange Management (Cross Border Merger) (Amendment) Regulations, 2026, Reserve Bank of India (Gazette of India).
Master Direction - Foreign Investment in India, Reserve Bank of India.
Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019, Reserve Bank of India.
Master Direction - Overseas Investment, Reserve Bank of India.
Foreign Exchange Management (Overseas Investment) Regulations, 2022, Reserve Bank of India.
Master Direction - Reporting under Foreign Exchange Management Act, 1999, Reserve Bank of India.
Press Note No. 2 (2026 Series), 15 March 2026, Department for Promotion of Industry and Internal Trade.
India: competition and stamp duty.
G.S.R. 547(E), Competition (Minimum Value of Assets or Turnover) Rules, 2024, Ministry of Corporate Affairs (Gazette of India).
G.S.R. 549(E), Competition (Criteria for Exemption of Combinations) Rules, 2024, Ministry of Corporate Affairs (Gazette of India).
Maharashtra Stamp Act, 1958, Schedule I (consolidated, modified up to 13 July 2026), Article 25(da), Inspector General of Registration, Maharashtra.
India: income tax (Central Board of Direct Taxes; Income-tax Act, 1961 text via Indian Kanoon where noted).
Income-tax Act, 2025, section 2 (including section 2(6), amalgamation), Central Board of Direct Taxes.
Income-tax Act, 2025, section 9 (including section 9(10)), Central Board of Direct Taxes.
Income-tax Act, 2025, section 17 (including section 17(1)(d)), Central Board of Direct Taxes.
Income-tax Act, 2025, section 70, Central Board of Direct Taxes.
Income-tax Act, 2025, section 119, Central Board of Direct Taxes.
Income-tax Act, 2025, section 458, Central Board of Direct Taxes.
Income-tax Act, 2025, section 506, Central Board of Direct Taxes.
Income-tax Act, 2025, section 536, Central Board of Direct Taxes.
Income-tax Act, 1961, section 47, Parliament of India (Indian Kanoon).
India: SEBI, offer documents and official reports.
SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, last amended 21 March 2026, Securities and Exchange Board of India.
SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, last amended 4 December 2025, Securities and Exchange Board of India.
SEBI Board memorandum for the meeting of 18 June 2025 (ICDR review, including regulation 8), Securities and Exchange Board of India.
Pine Labs Limited, Draft Red Herring Prospectus dated 25 June 2025, filed with SEBI.
Pine Labs Limited, Prospectus (November 2025), filed with SEBI.
Billionbrains Garage Ventures Limited (Groww), Prospectus dated 7 November 2025, filed with SEBI.
Meesho Limited, Red Herring Prospectus dated 27 November 2025, filed with SEBI.
PhonePe Limited, Updated Draft Red Herring Prospectus - I (January 2026), filed with SEBI.
Zepto Limited, Updated Draft Red Herring Prospectus - I (June 2026), filed with SEBI.
Capillary Technologies India Limited, Draft Red Herring Prospectus (June 2025), filed with SEBI.
Economic Survey 2022-23, Volume I, Chapter 9, Box XI.5 (flipping and reverse flipping), Ministry of Finance.
United States (State of Delaware; US Code and Code of Federal Regulations via Cornell Law School's Legal Information Institute).
Delaware Code, Title 8, Chapter 1, Subchapter IX (merger, including sections 252, 253 and 259), State of Delaware.
Delaware franchise tax, Delaware Division of Corporations.
Delaware Division of Corporations fee schedule (revised 1 August 2026), Delaware Division of Corporations.
26 U.S. Code section 367 (foreign corporations), US Congress.
26 U.S. Code section 7874 (expatriated entities and their foreign parents), US Congress.
26 CFR 1.367(a)-3 (treatment of transfers of stock or securities to foreign corporations), US Department of the Treasury.
26 CFR 1.367(a)-7 (outbound transfers of property described in section 361(a) or (b)), US Department of the Treasury.
Singapore (Attorney-General's Chambers, Singapore Statutes Online).
Companies Act 1967, section 210, Singapore.
Companies Act 1967, section 212, Singapore.
Companies Act 1967, section 215A, Singapore.
Companies Act 1967, section 344A, Singapore.
Companies Act 1967, section 355 (transfer of registration), Singapore.
Income Tax Act 1947, section 10L, Singapore.
United Kingdom (legislation.gov.uk, The National Archives).
Companies (Cross-Border Mergers) Regulations 2007 (SI 2007/2974), UK Government.
Companies Act 2006, section 895, UK Parliament.
Companies Act 2006, section 1003, UK Parliament.
Taxation of Chargeable Gains Act 1992, section 135, UK Parliament.
Finance Act 2026, section 37, UK Parliament.
Mauritius and the Cayman Islands.
Companies Act 2001 (consolidated to 31 August 2026), Corporate and Business Registration Department, Mauritius.
Companies Act (2025 Revision), Cayman Islands Government.
Disclaimer
This article is for education and general business information only and is not legal, financial or tax advice. It states the law as at 12 October 2026. Pending items may change it: the Corporate Laws (Amendment) Bill, 2026, the Joint Committee's re-domiciliation recommendation and the draft Foreign Exchange Management (Foreign Investment) Rules, 2026 are not yet law, and the move to the Income-tax Act, 2025 and foreign tax rules are still settling.
A reverse flip needs advice in India and in the parent's home country. Before acting, consult a qualified adviser in each jurisdiction: a company secretary, chartered accountant or lawyer in India, and a lawyer and tax adviser where the parent is incorporated.
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