Flipkart Private Limited ("Flipkart Pvt. Ltd.") is a Singapore-based investment holding company that holds securities of the various companies forming part of the Flipkart group ("Flipkart Group"). Flipkart Pvt. Ltd. is on its journey to shift its legal domicile from Singapore to India via an intra-group merger, effectively making Flipkart Internet Private Limited ("Flipkart Internet"), the Indian subsidiary of Flipkart Pvt. Ltd., the new parent company.
The process commenced when a petition was filed before the principal bench of the National Company Law Tribunal ("NCLT") by Flipkart Internet, under Sections 230-232 of the Companies Act, 2013 ("Companies Act"). The petition was filed for the sanction of the proposed scheme of amalgamation, which stipulates that the merger will take place in two stages. First, seven Singapore-based entities ("Transferor Companies") will be merged into Flipkart Internet. Following this, Flipkart Pvt. Ltd. will merge with Flipkart Internet, which will become the new holding company.
Flipkart Pvt. Ltd. aspires to tap the Indian capital markets by releasing an IPO, which would be essential to move its holding structure back to India. Considering that Flipkart Internet is India's largest e-commerce platform, this process, known as reverse flipping, will be complex and lengthy. However, one major barrier in the process has been cleared as the NCLT sanctioned the scheme of amalgamation vide its order dated December 12, 2025 ("Order").
Reverse flipping is the process of restructuring a group of companies to transfer back the holding regime of the group to an entity incorporated in India. This process has become an increasingly frequented path for startups that have been in the industry for several years, aiming to consolidate governance, simplify the structure of the group of entities and attract domestic capital. The process is peppered with multiple regulatory compliances, including requiring the NCLT's approval of the proposed merger scheme, the compliances mandated by the Companies Act, and the Foreign Exchange Management Act, 1999 ("FEMA"). This article maps out the key statutory and compliance routes under Indian law that Flipkart has already undergone, as well as must traverse for a successful reverse flip.
Sections 230-232 of the Companies Act constitute the statutory mechanism for compromise, arrangement and amalgamation schemes, which continue to be the most commonly deployed route for complex corporate restructurings involving multiple entities and cross-border elements. For transactions of the scale and structure contemplated by Flipkart's reverse flip, this route provides both procedural certainty and judicial validation.
The process is initiated by an application before the jurisdictional bench of the NCLT, seeking directions for convening meetings of shareholders and creditors. At this stage, the NCLT undertakes a prima facie assessment of the legal tenability of the proposed scheme before permitting it to be placed before the stakeholders. Upon satisfaction, the NCLT issues directions regarding notices, disclosures, class constitution and voting.
Under Section 230, the scheme must be approved by a majority of 3/4th (three-fourths), in value, of the members or creditors, as applicable, present and voting. Pursuant to the statute, only shareholders holding not less than 10% (ten per cent) of shareholding or creditors representing not less than 5% (five per cent) of the outstanding debt are permitted to raise any objections with regard to the merger scheme. In cases particularly involving intra-group restructurings, the NCLT may dispense with meetings of creditors where such creditors or a class of creditors, having at least 90% (ninety per cent) value, agree and confirm, by way of an affidavit, to the scheme of compromise or arrangement. In the Order sanctioning Flipkart's reverse flip, the NCLT dispensed with the requirement of convening meetings of the secured creditors, equity shareholders and unsecured creditors of Flipkart Internet.
Following stakeholder approval, the merger scheme is presented before the NCLT for its final sanction. The NCLT examines the compliance of the merger scheme with the statutory procedure and assesses whether the scheme is fair, reasonable and not contrary to law or public policy. The NCLT's assessment is dependent solely on the scheme's adherence to the legal framework, providing no opinion on the commercial wisdom of the stakeholders.
Where the scheme has cross-border implications, the NCLT's sanction operates subject to compliance with applicable foreign exchange laws. Accordingly, while NCLT approval is a necessary precondition, it does not obviate the requirement to satisfy independent regulatory requirements under the FEMA.
A core tenet under the FEMA is that the Reserve Bank of India's ("RBI") approval or compliance with the government approval route may be required before the transaction takes effect.
Rule 25A(1) of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 ("Rules") requires prior approval of the RBI for a cross-border merger. While certain cross-border mergers may not attract the requirement of an explicit no-objection certificate ("NOC") from the RBI, such exemptions cannot be universally presumed. The exception was applicable in the reverse-flip of Zepto Private Limited ("Zepto"). Therein, the Mumbai bench of the NCLT observed that the scheme of arrangement fell under Regulation 9 of the Foreign Exchange Management (Cross Border Merger) Regulations, 2018 ("Cross Border Merger Regulations"). This Regulation provides for a deemed prior approval of the RBI and thus, there was no requirement for an NOC from the RBI.
As per Regulation 9(1) of the Cross Border Merger Regulations, if a reverse flip transaction strictly adheres to the conditions and reporting requirements of the Cross Border Merger Regulations, the RBI's approval is automatically deemed to have been granted as required under Rule 25A. While the same cannot be presumed for Flipkart at this stage, FEMA compliance may hinge not merely on deemed RBI approval, but on the requirement to obtain government approval under the foreign investment framework detailed below.
The reverse flip may also require approval under Press Note 3 due to one of the shareholders being Tencent Holdings Ltd. ("Tencent"), a Chinese technology conglomerate. Press Note 3 was given effect by amending the Foreign Exchange Management (Non-Debt Instrument) Rules, 2019 ("NDI Rules").
Press Note 3 mandates that any foreign investment from an entity of a country sharing a land border with India, or where the beneficial owner of the investment is situated in or is a citizen of such a country, must be routed through the government-approval route, irrespective of sectoral eligibility under the automatic route. This rule is intended to curb opportunistic takeovers of Indian companies. However, there is no minimum percentage threshold prescribed for determining when beneficial ownership becomes material. As a result, even relatively small shareholdings may trigger compliance obligations.
In the case of Flipkart, the implementation of the scheme may involve the issuance of shares by Flipkart Internet to non-resident shareholders, pursuant to a court-sanctioned amalgamation. This would effectively reconstitute the foreign shareholding profile of Flipkart Internet. Where such reconstitution results in beneficial ownership traceable to a Chinese investor such as Tencent, government approval as contemplated by Press Note 3 becomes a necessary precondition for FEMA compliance.
At its core, the reverse flipping framework seeks to encourage large, India-facing enterprises to realign their holding structures domestically. Particularly for Flipkart, the scheme will result in efficient management and decision-making by eliminating duplicate corporate procedures in Singapore due to a streamlined holding structure and simplifying inter-company transactions.
At the same time, Flipkart's reverse flip underscores that judicial sanction operates alongside, and not in substitution of FEMA compliance. The considerations of beneficial ownership-based scrutiny, particularly in the presence of minority investments from land-border jurisdictions, demonstrates the layered nature of regulatory oversight. As an increasing number of mature startups contemplate moving their domicile back to India, Flipkart's path serves as an instructive precedent, illustrating that even though India has eased the pathway for homecoming, successful execution ultimately depends on navigation of overlapping statutory and policy thresholds.
About the authors: Akanksha Dua is a Partner and Shreya Rakheja is an Associate at Obhan & Associates.
Disclaimer: The opinions expressed in this article are those of the author. The opinions presented do not necessarily reflect the views of Bar & Bench.
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