Razorpay’s Shift to India and Its Tax Implications

Razorpay, a prominent fintech unicorn, is poised to face a tax obligation of around $150 million (about Rs 1,280 crore) as it transitions its base from the US back to India, according to information from reliable sources. The firm made an official announcement regarding this relocation on Thursday.

Understanding Razorpay’s Tax Situation

The tax amount owed often depends on the company’s valuation and the results from independent audits. Razorpay previously achieved a valuation of $7.5 billion when it secured $375 million in funding during December 2021. As reported initially by Moneycontrol, Razorpay intends to fulfil this tax requirement using its internal cash resources.

Other Companies That Have Made Similar Moves

Numerous companies, including PhonePe, Dream11, Groww, and Zepto, have already completed their own domicile transitions to India. While Zepto and Dream11 have not shared the specific tax amounts paid for their relocations, PhonePe and Groww paid Rs 8,000 crore (equivalent to $1 billion at that time) and Rs 1,340 crore (approximately $157 million) in taxes, respectively, to execute their transitions.

Razorpay’s Future Plans

Despite the significant tax implications, Razorpay currently has no immediate intentions to go public. Nevertheless, the company has fulfilled important regulatory requirements, including its conversion into a public limited company, along with obtaining approval for the merger of Razorpay Inc. with Razorpay India.

Razorpay’s Financial Performance

Razorpay stands out as one of the few profitable unicorns within the fintech arena. In the fiscal year 2024, the company reported an impressive revenue of Rs 2,068 crore alongside a profit of Rs 35 crore. The results for fiscal year 2025 are still pending announcement.