Meesho Completes Its Reverse Flip to India

Meesho, a burgeoning e-commerce platform, successfully concludes its reverse flip to India following the final approval from the National Company Law Tribunal (NCLT) last week. Recent filings with the Registrar of Companies indicate that Meesho’s board has endorsed the merger of its US-based entity, Meesho Inc., with its Indian counterpart.

Strategic Shift to a Fully Indian Entity

In this process, shares of the Indian entity have been allocated to US investors, transforming Meesho into a completely Indian entity. Reports suggest that the company anticipates a tax payment ranging from $280 million to $300 million in the US for relocating its domicile.

IPO Plans on the Horizon

Backed by Softbank, Meesho is poised to file its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) valued at $1 billion. The e-commerce giant has identified several leading banks for this endeavour, including Morgan Stanley, Kotak Mahindra Capital, JP Morgan, and Citi Bank.

Funding and Growth Trajectory

According to various sources from startup data intelligence platforms, Meesho has successfully raised over $1 billion in funding thus far, with contributions from significant investors such as Softbank, Prosus, Fidelity Investments, and Peak XV.

Impressive Financial Performance

The company has demonstrated remarkable growth, reporting a 33% year-on-year revenue increase, amounting to Rs 7,615 crore for the fiscal year ending March 2024. Additionally, Meesho significantly narrowed its adjusted losses by 97%, reducing them to Rs 53 crore in FY24.

Joining the Trend of Domicile Relocation

This reverse flip positions Meesho alongside other prominent companies like Razorpay, Groww, Zepto, Dream11, and PhonePe, all of which have reverted their domiciles back to India. For instance, Razorpay incurred a tax liability of $150 million, while PhonePe and Groww paid Rs 8,000 crore ($1 billion at the time) and Rs 1,340 crore ($157 million) in taxes, respectively, to facilitate their relocations. Notably, Meesho’s rival Flipkart, valued at around $36 billion, is also in the process of shifting its domicile from Singapore back to India.