Startup Reverse Flips, FDA Crackdown On Zepto, and DeHaat's Acquisition

A few years ago, having a Singapore or Delaware-based holding company was a badge of honour for Indian startups. It meant you had arrived, and you were global. You could raise money faster, onboard foreign investors easily, and maybe, list on the NASDAQ. India’s regulatory, legal, and financial systems were not very startup-friendly at that time. Overseas structures offered better legal flexibility, less paperwork, and less headache overall.

Things have changed now. The same startups that once set up HQs abroad are now slowly coming back. It's called a "reverse flip," and it’s happening a lot.

Why? Because home suddenly looks more lucrative than ever.

India's IPO market has come alive. Startups listing here get higher valuations, stronger brand visibility, and enthusiastic retail participation. According to estimates, tech companies going public in India see valuations 30–50% higher than they would abroad. It’s not just about the money, but investors now trust Indian-domiciled companies more. Regulators have also simplified the processes, and governance has improved. Reserve Bank and MCA have rolled out faster approval routes, especially for inbound mergers.

But this homecoming isn’t cheap.

When Razorpay moved its parent entity from the US to India, it had to pay an estimated $400 million in taxes across both countries. PhonePe paid about INR 8,000 crore (~$1 billion) in capital gains taxes to the Indian government. Groww’s shift from Delaware to Bengaluru added INR 1,340 crore to its tax bill in the US, enough to push it into a loss for that year.

So why are companies still doing it?

Because the long-term upside is clearer now than it was before. IPOs in India are more accessible, and regulatory processes are easier. Running a fintech or regulated entity under an Indian parent means less hassles. Additionally, with global capital markets cooling and dual listings not allowed, startups have to pick one home and most of them are picking India.

But, every reverse flip is different. Some use inbound mergers, while others go through share swaps. And the tax outcomes vary wildly depending on the path you take. For example, inbound mergers can be tax-neutral if they meet the definition of "amalgamation" under Indian law. Share swaps, on the other hand, often result in huge capital gains for foreign investors. And that's just what happened with PhonePe, wherein its foreign investors had to pay a substantial amount in capital tax gain taxes.

The trickiest part is the valuation. Tax authorities in both countries want their share of the value being transferred - especially if it includes intellectual property. How do you value a brand, a codebase, or user data? Any mistake could cost millions in unnecessary taxes. This is where things get technical. Ultimately, it's a very basic question: how much is your business really worth, and who gets to tax that value?

The Indian government says - you're welcome back, once you've settled your financial responsibilities. As Piyush Goyal said, "Here’s where you get the valuations." And so, the tax burden is seen as the cost of re-entering a maturing, thriving market. No waivers. No shortcuts.

We think this shift tells us something deeper. The startup dream in India has grown up, and we're no longer just chasing Silicon Valley. We’re building our own scale, our own capital base, and our own market depth. And startups are realising that being rooted in India is not a limitation anymore. It's a leverage.

Over the next few years, more Indian startups, especially big ones and those getting ready to go public, are likely to shift their base back to India. However, this reverse flipping will come with high costs, complex paperwork, and time. Still, for those who plan well and are willing to take a short-term hit, the long-term benefits can be worth it. It's possible this will inspire many new founders also, to set up and start their businesses directly in India.

Because in the end, it’s not just about building a startup in India - it’s about building for India, from India.

Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.

“Yahi Raat Antim, Yahi Raat Bhari”: FDA Suspends Zepto’s Dharavi Warehouse License For Food Safety Violations

Zepto’s 10-minute promise hit a snag as the FDA suspended its Dharavi warehouse license over some unsavoury findings—think fungus, expired goods, and stagnant water.

Not exactly the recipe for customer trust. The company’s now scrambling with an internal review, promising a cleanup that’s hopefully faster than their delivery.

Read more here

“Mai Nikla Gaddi Leke”: VinFast Eyes Up To 1.5 Lakh Annual EV Production In India

VinFast is revving up its India plans, starting with 50,000 electric cars a year - aiming to hit 1.5 lakh soon. But these wheels aren’t just for local roads; they’re cruising toward Middle Eastern and African markets too.

And with a target of 3,500 domestic hires by 2030, it looks like India’s not just the factory floor - it’s part of the ride.

Read more here

“Hum Saath Saath Hai”: DeHaat acquires climate-tech firm NEERX to expand precision farming tools

DeHaat just planted a smart seed by acquiring climate-tech startup NEERX, known for tools like ISRO-validated soil sensors.

With this move, precision farming’s getting a high-tech boost for over 13 million farmers in DeHaat’s network. From smarter soil to sharper crop advice, agri-tech just got a lot more grounded—and cloud-powered.

Read more here

“Honge Sabke Sapne Sakar”: Unicommerce introduces ‘Blink Mode’ to accelerate ecommerce order fulfilment

Unicommerce just hit “Blink Mode” on e-commerce fulfilment—think bulk-packing 2,500 orders with image-guided speed.

The new Uniware upgrade trims down time, effort, and costs with smart packaging, lightning-fast labels, and auto-updated catalogs. For online sellers, it’s a wormhole to smoother sales.

Read more here

1. Aequs has quietly filed draft papers with SEBI, aiming to raise $200 million through an IPO. Joining the stealth mode squad, it's following the likes of Groww, Shiprocket, and boAt in taking the confidential DRHP route.
   Read more here

2. Udaan has wrapped up its Series G round with a solid $114 million boost, aiming to scale categories and customer reach. With IPO prep underway and NCLT’s nod for business consolidation, the B2B giant is streamlining for the spotlight.
   Read more here

3. Snitch has stitched up $40 million in Series B funding, led by 360 One Asset, to ramp up quick commerce and offline retail. With eyes on top Indian cities and overseas markets, the menswear brand is suiting up for a bold expansion spree.
   Read more here

4. Bengaluru-based Spense has raised $1.85M in pre-seed funding to build next-gen programmable banking and card infrastructure. Backed by names like Kunal Shah and Microsoft execs, it’s now geared up to onboard banks and push fintech boundaries.
   Read more here