Bengaluru-based e-commerce firm Meesho has received approval of the National Company Law Tribunal (NCLT) to demerge from the US parent — a step that would allow it to shift its headquarters back to India from Delaware in the USA.
For the reverse flip, the company is likely to face a tax outgo of around $280-300 million in the USA. According to people familiar with the matter, the company is likely to file the papers for its initial public offering (IPO) by the end of this month. However, it is likely to take the confidential route for filing the papers.
In a statement, Meesho confirmed the NCLT order and said it was a part of the company’s ongoing transition to re-domicile here. It, however, did not confirm the tax outgo.
“With the majority of our operations, including customers, sellers, creators and Valmo partners already based here (in India), this step aligns our corporate structure with our day-to-day business footprint,” the spokesperson said.
Meesho had approached the NCLT for the demerger in January. In the same month, it also closed a $550 million funding round that saw the entry of some new investors like Tiger Global, Mars Growth Capital and Think Investments.
The company was then valued at around $3.9-4 billion, lower than its peak valuation of $5 billion.
Through the IPO, the e-commerce major is likely to raise around $1 billion at a valuation of $10 billion. It had earlier shortlisted Morgan Stanley, Kotak Mahindra Capital, JP Morgan, and Citi for the same.
Last week, the homegrown e-commerce platform also transitioned into a public entity from a private one.
Meesho’s rival Flipkart is also working on relocating its domicile from Singapore to India and is likely to launch the IPO by the end of this year.
With the reverse flip, Meesho has joined a number of startups that have recently paid hefty taxes to relocate their base to India. Recently, Razorpay paid $150 million, PhonePe and Groww paid $1 billion and $157 million in taxes, respectively, to complete the relocation.
