Razorpay’s ‘reverse flip’ to India may entail $300 million tax payment in US
Digital payments platform Razorpay plans to move its parent firm to India through a cross-country merger that may entail a tax payment of $250-300 million in the US, where it is currently domiciled, according to multiple people aware of discussions.
The planned merger will be between the US-registered firm and its Indian arm, they said.
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Offering CollegeCourseWebsiteIndian School of BusinessISB Product ManagementVisitIIT DelhiIITD Certificate Programme in Data Science & Machine LearningVisitIIM LucknowIIML Executive Programme in FinTech, Banking & Applied Risk ManagementVisitET first reported on May 9 about Razorpay being in the process of moving back its parent entity to India amid tighter fintech regulations.
Razorpay and its investors have recently considered a merger at a lower valuation from the peak of $7.5 billion ascribed to it in 2021. However, advisors to the deal — both in the US, as well as KPMG and Deloitte in India — are not in favour of this because of the payments processor’s paced growth trajectory over the last two years, the people cited said.
Discussion on valuation
A lower valuation would essentially make the tax liability relatively smaller, but those in the know said a steep cut may not receive regulatory clearance.
“Yes, there have been discussions to value the company at $3-4 billion, but external advisors are of the view that it may not be cleared by US authorities because of the company’s steady growth over the last year or so, even as peers in the US have seen correction in their valuations,” said one person aware of the developments.
Razorpay will seek clearance from the National Company Law Tribunal (NCLT) in the next two months
