Quick-commerce unicorn Zepto will no longer require a no-objection certificate (NOC) from the Reserve Bank of India (RBI) to merge its Indian and Singapore entities, according to a recent ruling. This is a crucial step for its IPO planned later this year.
On January 9, the Mumbai bench of the National Company Law Tribunal (NCLT) approved the cross-border merger of Mumbai-based Kiranakart Technologies, which operates Zepto in India, with its Singapore-based affiliate, Kiranakart.
“As the Scheme of Arrangement falls under Regulation 9 of Cross Border Merger Regulations, which clearly provides for an explicit deemed prior approval of the RBI, there will be no requirement for an NOC from the Reserve Bank of India,” the NCLT order stated.
A statutory notice was also sent to the RBI seeking their comments on the merger. “The Reserve Bank of India has not raised any objections,” the order read.
Zepto’s board approved the cross-border merger in October, aiming to reduce the number of legal entities and optimise its holding structure. The merger is expected to enhance synergies, expedite decision-making, reduce costs, and simplify the structure for future fundraising.
“The board of directors of the petitioner company believes that the scheme is in the best interests of the entity and their respective stakeholders, including its shareholders, employees, and creditors,” the NCLT order added.
Zepto’s Singapore-based entity is undergoing a parallel merger application under Singaporean laws, with approval from the Registrar in Singapore under process.
Zepto, a four-year-old startup valued at $5 billion, raised $1.35 billion in funding last year to expand its network of dark stores and strengthen its operations in new cities. The company is expected to file its IPO papers by April 2025, according to media reports.
Among other startups, e-commerce unicorn Meesho is also in the process of shifting its domicile to India before its planned IPO. Its India entity is Fashnear Technologies, while its holding company Meesho Inc is in the US. IPO-bound fintech Pine Labs also moved its domicile to India last year, following approvals from NCLT and the Singapore court. In 2023, Walmart-owned PhonePe moved its domicile to India from Singapore and paid nearly $1 billion in taxes.