Following the NCLT order, Zepto becomes an Indian company with no opposition to the cross-border amalgamation of the two entities
Reportedly, Zepto will not require a no-objection certificate (NOC) from the Reserve Bank of India (RBI), per the NCLT order
The order further added that the flip to India will enable Zepto to directly align with the regulatory environment, manage risks, and adhere to local policies
The National Company Law Tribunal (NCLT) has approved the merger of Mumbai-based Kiranakart Technologies, which operates the quick commerce platform Zepto, with its Singapore-based affiliate, Kiranakart Pte Ltd.
Following the NCLT order, Zepto
becomes an Indian company with no opposition to the cross-border amalgamation of the two entities.
Kiranakart Technologies Private Limited is the Indian entity operating Zepto, while its Singaporean holding company is Kiranakart PTE LTD.
Zepto will not require a no-objection certificate (NOC) from the Reserve Bank of India (RBI), per the NCLT order. The tribunal noted that the RBI has not raised any objections, and since the Scheme of Arrangement falls under Regulation 9 of the Cross Border Merger Regulations, which provides for deemed prior approval from the RBI, an explicit NOC is not necessary.
The order stated, “The Scheme shall also enable the Companies to address the competitive regulatory environment, risks and policies, better management, value consolidation and creation of shareholder’s value.”
With the flip of its holding company to Mumbai, India, Zepto aims to streamline its group structure by reducing the number of legal entities to “optimise the legal entity structure” for enhanced business synergies, quicker decision-making, and significant cost savings.
The NCLT Mumbai bench noted that this simplified structure would support future fundraising efforts from Indian and global investors.
The order further added that the flip to India will enable Zepto to directly align with the regulatory environment, manage risks, and adhere to local policies. This move also aims to streamline operations by eliminating redundant administrative functions and multiple record-keeping processes, significantly reducing administrative, managerial, and other common expenses.
This development is expected to expedite Zepto’s plans for an initial public offering (IPO) in India later this year.
Zepto’s domicile flip to India is expected to be formally completed within 30 days.
Earlier, Inc42 reported that Nexus-backed Zepto, is planning to reverse flip to India. Sources close to the company revealed that Zepto aims to join the ranks of Eruditus, Razorpay, Pine Labs, and Groww in the reverse flipping queue. However, similar to PhonePe’s situation, where tax liabilities reached up to $900 Mn, many of these unicorns are taking a cautious approach and strategising the most efficient reverse flipping structure.
“The scheme appears to be fair and reasonable and (it) is not in violation of any provisions of law and is not contrary to public policy,” the Mumbai bench of NCLT observed in its January 9 order.
The merger has also received approval from Singaporean authorities.
The quick commerce platform is looking to file its initial public offering (IPO) draft papers in March or April this year.
The company has already obtained the necessary permissions to relocate its base from Singapore to India ahead of the public listing.
Founded in 2021 by Aadit Palicha and Kaivalya Vohra, Zepto currently operates under a B2B model. Its parent, Kiranakart Technologies, procures goods directly from brands and sells them exclusively to its licensee companies, including the likes of Geddit Convenience, Drogheria Sellers and Commodum Groceries.
Zepto grabbed headlines last year after raising a whopping $1.3 Bn in funding and outpacing Blinkit and Swiggy Instamart in terms of revenue.
The quick commerce unicorn is currently valued at close to $1.4 Bn.
