Why Walmart-backed Flipkart is finally moving its headquarters to India

Subscribe to enjoy similar stories. Walmart-controlled Flipkart received a key approval to shift its domicile back to India, a prerequisite for a local listing, in a move that reflects a shift in India-US economic ties amid prolonged bilateral trade negotiations. The National Company Law Tribunal (NCLT) approved the re-domiciling scheme on Friday, according to an order reviewed by Mint.

The restructuring is fair and not prejudicial to the interests of shareholders or creditors, the tribunal said, while clearing India-based Flipkart Internet Pvt. Ltd’s intra-group amalgamation scheme involving eight Singapore-incorporated entities. The combined entity will be called Flipkart Internet Pvt.

Ltd. The NCLT approval for re-domiciling follows the Singapore High Court’s clearance a few weeks ago. The only remaining requirement is the Press Note 3 (PN3) security clearance, which is necessary under India's foreign direct investment (FDI) rules.

PN3 clearance is needed for overseas investments in sensitive sectors or from countries sharing a land border with India, a move largely targeted at China to curb opportunistic takeovers and acquisitions of Indian companies during the covid-19 pandemic. Tencent, a Chinese tech company, owns around 5% of Flipkart. US retail giant Walmart Inc holds a controlling stake in Flipkart and exercises full operational and strategic control.

The Flipkart case involves “a very small (Chinese) investment, and is purely financial in nature. Typically, concerns arise only when there is a technology partnership involved, which is not the case here, or when the stake exceeds 10%. A 5% holding, that too without any control, is a no-brainer," the second person quoted earlier said.