Sep 11, 2024

'How the tables turn': Zerodha's Nithin Kamath hails 'ghar-wapsi' as Indian firms flip back to home turf 'How the tables turn': Zerodha's Nithin Kamath hails 'ghar-wapsi' as Indian firms flip back to home turf This shift comes at a time when the number of Indian firms with a market cap exceeding $1 billion is at an all-time high, and the country’s stock market has witnessed a massive surge in retail participation, with 10 crore unique investors compared to just 3 crore in 2020. Updated Sep 11, 2024, 8:21 PM IST Reverse flipping, which refers to a company’s return to its home country for regulatory or tax benefits, has become a global trend. Indian companies that once incorporated abroad to build products for the local market are now making their way back home. Zerodha co-founder Nithin Kamath referred to this trend in a post on X as a 'ghar-wapsi,' signaling the reversal of an issue he raised three years ago. "Three years ago, I shared the problem of Indian companies building for India but incorporating outside the country. Now, things are the other way around. How the tables turn!" he wrote. Related Articles This shift comes at a time when the number of Indian firms with a market cap exceeding $1 billion is at an all-time high, and the country’s stock market has witnessed a massive surge in retail participation, with 10 crore unique investors compared to just 3 crore in 2020. "Thanks to the bull market and the ease of going public, there's a 'ghar-wapsi' of Indian companies incorporated outside," Kamath wrote. "To add to this, the Ministry of Corporate Affairs formally opened the doors of 'reverse flipping' or coming home to India yesterday". The number of companies with a market cap >$1 billion is at an all-time high. Along with this, the allocation of Indian households' investments in the stock market has also increased substantially. There are now 10 crore unique investors, compared to 3 crore in 2020. Thanks to… pic.twitter.com/E5WS6O4B9P The MCA has amended its Companies (Compromises, Arrangements, and Amalgamations) Amendment Rules, setting compliance requirements for companies seeking to relocate back to Indian shores. These include obtaining prior approval from the Reserve Bank of India (RBI) and fulfilling the provisions of Section 233 of the Companies Act. Additionally, an application must be submitted to the Central government to complete the process. Reverse flipping, which refers to a company’s return to its home country for regulatory or tax benefits, has become a global trend. Kamath pointed to a recent report by Mario Draghi, the former president of the European Central Bank, that said nearly 30% of unicorns founded in Europe between 2008 and 2021 shifted their headquarters abroad, primarily to the US. India now sees a similar trend in reverse, as companies recognize the growing potential of the domestic market while benefiting from local regulatory changes. Published on: Sep 11, 2024, 8:21 PM IST