In a major milestone ahead of its much-anticipated IPO, Meesho has secured approval from India’s National Company Law Tribunal (NCLT) to demerge from its U.S.-based holding company. The move clears a key legal hurdle as the e-commerce unicorn looks to shift its corporate domicile back to India—a decision that aligns with the operational realities of one of the country’s fastest-growing online marketplaces.
Why the Reverse Flip?
Incorporated in Delaware, U.S., in 2016, Meesho was part of a larger trend of Y Combinator-backed Indian startups setting up shop overseas to access global capital. However, that playbook is quickly changing. With Indian capital markets maturing and regulatory tailwinds favoring local listings, companies like PhonePe, Razorpay, Groww, and now Meesho, are “flipping” back to India.
“With the majority of our operations, including customers, sellers, creators and Valmo partners already based here, this step aligns our corporate structure with our day-to-day business footprint,” a Meesho spokesperson said.
What the NCLT Approval Means
The tribunal’s order confirms that objections from the Registrar of Companies, the Regional Director, and the Income Tax Department have been adequately addressed. With this green light, Meesho can now complete the final leg of its flip—merging its nearly dormant U.S. holding entity into its Indian arm.
But this structural realignment doesn’t come cheap. Meesho is reportedly facing up to $300 million in U.S. exit taxes, making it one of the costliest startup flips to date, second only to PhonePe’s $1 billion tax outgo during its Singapore-to-India relocation in 2023.
IPO on the Horizon
With its flip nearly complete, Meesho is expected to file its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) in the coming weeks. The company aims to raise up to $1 billion, targeting a valuation of $10 billion, according to earlier reports.
To facilitate the listing, Meesho has already:
- Transitioned into a public limited company
- Closed a $550 million round led by Tiger Global, Mars Growth Capital, and Think Investments
- Appointed Kotak Mahindra Capital, Citi, JP Morgan, and Morgan Stanley as lead IPO bankers
Notably, much of the $550M round was secondary, valuing Meesho at $3.9 billion, slightly below its previous peak of $5 billion.
India’s Startup Flip Revolution
Meesho’s reverse flip reflects a larger movement in India’s startup ecosystem. As Indian stock exchanges become more attractive for growth-stage companies, homegrown tech firms are now choosing to list domestically, moving away from the default U.S. or Singapore routes.
SEBI’s confidential IPO filing framework is further accelerating this trend, with companies like Flipkart, Groww, and Zepto also preparing for India-based listings.
