The Great Homecoming: How Indian Startups Reverse-Flip Back to India Under Sections 230-234 (2026 Playbook)

Last updated: 6 August 2026  |  By CS Sapna Malpani, Practising Company Secretary, Bangalore

Groww paid a US tax bill of about USD 160 million simply to move its holding company from Delaware back to India. PhonePe redomiciled to India in 2023 and filed its updated draft IPO papers with SEBI in January 2026. Zepto shifted its parent from Singapore to India ahead of its own listing. This is the reverse flip, and it has quietly become the single most expensive corporate action a funded Indian startup will ever take. The tax is only part of the bill. The bigger risk is time: pick the wrong legal route and a homecoming that should take four months instead sits in front of the National Company Law Tribunal for eighteen, and your IPO window closes while you wait.

If your company was set up as a Delaware or Singapore parent with an Indian operating subsidiary, and you now want the holding company in India before you raise your next round or list, the machinery you need lives in Sections 230 to 234 of the Companies Act, 2013. This is the reverse flipping guide the founders currently negotiating their homecoming keep asking for.

What “reverse flipping” actually means

A “flip” is when an Indian startup puts a foreign company on top of its structure, most often a Delaware C-corp or a Singapore Pte Ltd, and makes the Indian company a subsidiary of that foreign parent. Founders did this for years to raise dollars from US and global funds who preferred to invest into a familiar jurisdiction.

A reverse flip undoes that. It brings the parent home, so that the company Indian investors buy into on the stock exchange is an Indian company governed by Indian law. The reason is simple arithmetic: India’s public markets now reward these businesses with valuations and liquidity that Nasdaq no longer guarantees for a mid-cap consumer-internet name, and SEBI will only let an Indian-incorporated company list here. To ring the bell in Mumbai, the holding company has to be in India first.

There are three ways to execute it. You can merge the foreign parent into the Indian company through a court-sanctioned scheme (the subject of this guide). You can do a share swap where foreign shareholders exchange their shares for shares in the Indian company. Or you can wind up the foreign entity and distribute the Indian shares. The merger route is the cleanest because it transfers everything, assets, contracts, ESOP pools and shareholders, by operation of law once the Tribunal or Regional Director signs off.

The problem: the route you pick decides whether your IPO slips by a year

Every founder planning a homecoming faces the same fork. A cross-border merger under Section 234 read with Rule 25A can travel down one of two very different roads, and the road you qualify for changes your timeline by a year or more.

The full route runs through Sections 230 to 232 and needs the NCLT to sanction the scheme. That means a first-motion application, meetings of shareholders and creditors, notices to a long list of regulators, a second-motion petition, and a final hearing. In practice, a cross-border scheme takes 12 to 18 months. For a company trying to hit a specific IPO window, that is not a delay, it is a missed year.

The fast-track route under Section 233 skips the Tribunal entirely. The Regional Director approves the scheme, and the whole thing can close in 3 to 6 months. The catch has always been eligibility: only certain classes of companies could use it. That is exactly what the September 2025 amendment changed, and it is why the reverse-flip conversation shifted this year.

What changed in September 2025

On 4 September 2025 the Ministry of Corporate Affairs notified the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025. The amendment rewrote Rule 25, which governs the fast-track route under Section 233, and it did three things that matter to a company planning its homecoming.

First, it widened the classes of companies eligible for the fast-track route. Until the amendment, fast-track was reserved for mergers between two or more small companies, between a holding company and its wholly-owned subsidiary, and between start-up companies. The amendment opened the door to a broader set of unlisted-company combinations, to a holding company merging with a subsidiary that is not wholly owned, and to fellow subsidiaries within the same group.

Second, it extended the simplified process to demergers. A new sub-rule applies Rule 25 to a scheme of division or transfer of an undertaking, so a founder splitting a business unit out no longer automatically lands in front of the Tribunal.

Third, and most relevant to reverse flips, it built on the September 2024 change that inserted Rule 25A(5). That earlier change already let a foreign holding company merge into its Indian wholly-owned subsidiary through the fast-track route, with prior RBI approval, instead of the full NCLT scheme. The 2025 amendment streamlined the surrounding process. Read together, these two changes mean the classic reverse-flip structure, foreign parent merging down into the Indian company, can now often avoid the 12-to-18-month Tribunal path.

According to CS Sapna Malpani, “the practical effect is that a reverse flip that would have consumed an entire IPO cycle in NCLT can, for a company that qualifies, close inside a single financial year. The eligibility test is now the whole ball game. Founders should be pressure-testing which route they qualify for before they spend a rupee on the scheme.”

By the numbers

What you must do now: the reverse-flip checklist

If a homecoming is on your roadmap, work these steps in order. Each one has a form, a deadline or a decision behind it.

1. Fix the appointed date first. Section 232(6) requires the scheme to state an appointed date from which it takes effect. This date drives the accounting and the tax year of the merger. Decide it with your auditor before drafting, not after.
2. Run the eligibility test for the fast-track route. Check whether your structure fits Section 233 read with Rule 25 and Rule 25A(5), as widened in September 2025. A foreign parent merging into its Indian wholly-owned subsidiary is the classic qualifying case. If you qualify, you save roughly a year.
3. Clear the FEMA layer. The Foreign Exchange Management (Cross Border Merger) Regulations, 2018 govern the money side. An inbound merger that complies with these regulations is treated as approved by the RBI, provided the Managing Director or Whole-Time Director and the Company Secretary certify compliance. Get this certificate drafted early.
4. Model the tax before you commit. An inbound merger can be fully tax-neutral in India under Section 47(vi) and 47(vii) of the Income-tax Act if it meets the amalgamation definition in Section 2(1B). But the foreign-side tax is separate and can be large, as Groww’s USD 160 million bill showed. Model both jurisdictions with your tax counsel.
5. Draft the scheme and disclosures. For the NCLT route, the first-motion application goes in Form NCLT-1 with the scheme and the creditor-responsibility disclosures in Form CAA-1.
6. Serve every regulator notice. Form CAA-3 must reach the Central Government, ROC and Income-tax authorities in all cases, and the RBI, SEBI, CCI, stock exchanges and any sectoral regulator where relevant. Each has 30 days under Section 230(5); do not start the clock late.
7. Hold the meetings and clear the bar. Members and creditors must approve by 3/4 in value on the NCLT route, or 90% of shares and 9/10 of creditors by value on the fast-track route. File the chairperson’s report in Form CAA-4 within seven days.
8. File the order and stay compliant after. Once sanctioned, file the certified order in Form INC-28 within 30 days. Then file the annual statement of compliance in Form CAA-8 within 210 days of each financial year end until the scheme is fully implemented. Skipping this is the quiet default that Section 232(8) punishes.

The deeper implication

The reverse-flip wave is not a one-off. PhonePe, Zepto, Groww, Razorpay, Meesho, KreditBee and Pine Labs have all either completed or planned a homecoming, and several of them sit on the 2026 IPO list. The Ministry of Corporate Affairs has read that room. The 2024 and 2025 amendments to the fast-track rules point in one direction: make it easier for Indian-origin companies to bring their holding structures home without a two-year detour through the Tribunal.

According to CS Sapna Malpani, “the government has decided it wants these companies to list on Indian exchanges, and it is removing the procedural friction that used to make redomiciliation painful. My forward read is that the next round of amendments will shorten the cross-border merger timeline further and clarify the tax treatment, because the current foreign-side tax cost is the last big deterrent. Founders who start their route analysis now, rather than in the quarter before filing their draft prospectus, will be the ones who actually hit their listing window.”

Sections 230–232 vs 233 vs 234: which one is yours

These three sections are constantly confused, so here is the clean separation. Sections 230–232 are the general scheme-of-arrangement machinery: any compromise, arrangement, merger or demerger sanctioned by the NCLT. Section 233 is the fast-track shortcut that a defined set of companies can use to skip the Tribunal and get Regional Director approval instead. Section 234 is the enabling provision for cross-border mergers between an Indian company and a foreign company; it does not run on its own but plugs into either the NCLT route or, where eligible, the fast-track route, and adds the FEMA Cross Border Merger Regulations, 2018 on top.

For a reverse flip specifically, you are almost always doing an inbound merger, foreign parent into Indian company, under Section 234. The live question is only whether Rule 25A(5) lets you run it fast-track. A separate provision, Section 234 outbound (Indian company merging into a foreign one), is only allowed into notified jurisdictions and is rarely what a homecoming needs. If you are still weighing whether to keep money moving offshore instead, our guide on how an Indian company makes an overseas direct investment covers the opposite direction. And if the fast-track path looks open to you, read the mechanics in our fast-track merger under Section 233 guide.

Sources and references

• Companies Act, 2013, Sections 230, 232, 233 and 234, India Code and CAIRR (ca2013.com)
• The Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, IBC Laws / CAIRR
• Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025, SCC Online Times and AZB & Partners commentary
• Cyril Amarchand Mangaldas, “Aa Ab Laut Chalein: Key Considerations for Reverse Flips” (September 2025)
• Foreign Exchange Management (Cross Border Merger) Regulations, 2018, RBI
• Income-tax Act, 1961, Sections 2(1B) and 47(vi)/(vii)

Frequently Asked Questions

Disclaimer: This article is for general information and does not constitute legal or tax advice. Cross-border mergers involve company-law, FEMA and tax questions that turn on your specific facts. Consult a qualified professional before acting.