OPINION | Of mementos, multibagger IPOs, reverse flips and the rising Indian startup ecosystem

Today’s startups have a faster track for a flip, thanks to regulatory evolution. India’s legislative machinery is learning, adapting, and enabling.

“I was there when history was made….” This Groww badge, as a souvenir from its listing day ceremony, now sits proudly in my little treasure box.

Another memento: Two glass encased Point-of-Sale (PoS) machines, a gesture from the Startup Policy Forum on Pine Labs’ listing for Amrish Rau and Shailendra Singh of Peak XV as a mark of fintech’ legacy and ambition.

As I reflect on the past week attending two iconic IPO listings in Mumbai - Groww and Pine Labs - I feel deeply grateful to have witnessed these journeys up close over the last five years. First, as the head of public policy at Peak XV, India’s largest venture capital firm, and now as the founder of Startup Policy Forum, with both these new-age listed fintechs as our anchor founding members.

Lenin famously said: “There are decades when nothing happens, and then there are weeks when decades happen.” 

Nothing encapsulates last week better than this phrase.

India’s attraction as the home ground is growing

First, a monumental win for my former employer, Peak XV, India's largest venture capital firm, with eye-popping multibagger returns on both these spectacular investments.

Second, this week reflects that India’s fintech story has truly matured. Both Groww and Pine Labs are regulated fintechs that have now successfully listed, signalling that India’s fintech ecosystem is ready, confident, and public-market worthy.

Third, India is rising as the home ground of choice. It’s a decisive vote of confidence in India’s markets and its policy environment.

Flipping to list

Finally, the trend of “flip-and-list” is now a reality. What’s often overlooked is that these are among the first two companies to have reverse flipped and listed in India.

The term "reverse flip" or "redomicile" did not exist in the startup lexicon a few years ago. But as Indian markets matured and gained momentum, many startups that had incorporated overseas decided to flip back to India to tap the equity markets here.

This could be done in two ways — share swap mechanism (followed by PhonePe), or merger process (Groww, Meesho, Pine Labs and others).

For the merger process to go through, the law required companies to navigate the judicial process through the National Company Law Tribunal (NCLT).

Both Groww and Pine Labs experienced the chaos and complexity of India’s legislative and judicial machinery: files getting stuck, hearings delayed, and those endless “tareek pe tareek” moments.

Yet, they persevered, and their successful flips are a testament to how India’s policy landscape, while imperfect at times, delivers in the end, and is also playing catch up with changing times.

Working with the government to ease processes

Learning from the enormous delays and hurdles in the NCLT process, we strongly advocated for including these mergers in the fast-track mechanism, enabling companies to bypass the NCLT altogether.

Our efforts started two years ago, beginning with one pivotal meeting with the Secretary of Ministry of Corporate Affairs (MCA) attended by Lalit Keshre and Lalit Bhimani of Groww, Harshil Mathur of Razorpay, Prachi Buchar of Meesho, and Ashish Agrawal and I representing Peak XV.

The ministry was hugely responsive. This advocacy took a year of consistent effort, but the arguments on how reverse flips help India prevailed. Multiple doors were knocked, including the Ministry of Corporate Affairs, DPIIT, Invest India, Ministry of Finance, finally leading to a change in September 2024.

The new process now allows companies to flip back without NCLT involvement, applying directly to the Regional Director (RD) at the Registrar of Companies (RoC). Results are promising: Razorpay flipped back in a record 60 days.

Today’s startups have a faster track for a flip, thanks to regulatory evolution. India’s legislative machinery is learning, adapting, and enabling.

The Press Note 3 complications

Looking forward, while one major hurdle has been resolved, some reverse flip cases still face the challenge of PN3 approval. PN3, or Press Note 3 (2020), mandates prior government approval for foreign direct investments from countries sharing a land border with India, namely China.

This adds complexity especially where startup captables have entities or beneficial owners from China, requiring multiple clearances. Now, through the Startup Policy Forum, we are working on a playbook and actively working with multiple startups and relevant stakeholders to streamline this process.

Last week’s milestones demonstrate that faster reverse flip approvals will unlock a wave of IPOs, enabling more companies to raise capital while tapping into India’s vibrant equity markets.

This momentum will propel India’s journey forward as a global startup powerhouse.

Whether it’s the Groww badge in my treasure box or the PoS momentos on display in the Pine Labs and Peak XV offices, these souvenirs symbolise India’s rising entrepreneurial spirit, and are proof that bold journeys leave lasting legacies.

(The author is the President & CEO of the Startup Policy Forum, an industry platform that represents over 60 of India’s high-growth startups.) 

Views are personal and do not represent the stand of this publication.