Exclusive: Valuation cut at Groww in domicile flip back exercise; Razorpay may undergo similar reduction
The exercise is directed at minimising the tax burden in the US, where there is a provision to lower FMV taking into consideration various parameters such as stocks issued at lower prices, legal experts said.
Another large fintech, Razorpay, which has sought board approval to move its domicile to India, may see a similar 30-40% cut in fair market value, said a person close to the matter. The final number may differ as the math on the tax outgo will depend on calculations involving the delta between common and preferred stock and total fundraising over the years. Preferred stock or preference shares come with a number of benefits not available to holders of common stock.
Razorpay, which was last valued at $7.5 billion, is working with consulting firm Deloitte on the matter. The company will send its domicile application directly to the Competition Commission of India (CCI) and the Reserve Bank of India, skipping the National Company Law Tribunal (NCLT) route.
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