Why Are Startups Shifting Their Bases Back To India

Image credits to Entrepreneur.com Image credits to Entrepreneur.com

In an engaging turn of events, Eruditus, an edtech unicorn, has announced plans to reverse its domicile back to India, eyeing a position on either the Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE) in the near future. This move places Eruditus among a growing list of startups, including the likes of LivSpace, Meesho, Groww, and Razorpay, opting for a 'reverse flip' - transitioning their registered entities back to India from overseas locations. A trend initiated by PhonePe in October 2022, this strategic shift has seemingly gained momentum, with numerous unicorns contemplating or executing similar decisions.

The motivation behind this transformative shift lies in the quest to tap into India's expansive consumer market and harness the potential for business expansion. Notably, establishing a stronghold in the Indian market could afford these companies a nuanced understanding of local market dynamics, consumer preferences, and cultural nuances, thus enriching their strategic outlook and product/service offerings. The dialogue concerning reverse flipping has been further energized by changes in the Indian economic landscape, including modifications in round-tripping rules, increased accessibility to capital, and the maturation of India's capital markets as highlighted in the Economic Survey 2023.

Amidst this backdrop, the Indian government's concerted efforts to refine the nation's business environment and simplify the process of doing business have not gone unnoticed. Bolstering this transition is the inclination towards the Indian IPO market, which is gradually opening its doors wider, making public markets more approachable for domestic entities. As startups contemplate the intricate dance of domicile shifting, the compelling narrative of reverse flipping unfolds, marking a pivotal chapter in India's startup ecosystem.

For those intrigued by the strategic maneuvers of startups in the edtech space and beyond, this blog post sheds light on the profound implications of reverse flipping, backed by insights from industry experts and market dynamics. Dive deeper into the evolving landscape of India’s startup ecosystem by exploring the original blog post.

This post has originally been written by Entrepreneur.com on Mon, Jan 22, 24. Find the original post here at Entrepreneur.com
Connie Harrell

Working with investors and entrepreneurs to gain the best ROI possible.

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