Indian stock trading and investment platform Groww paid $159.4 million in taxes as it relocated its domicile from the U.S. back to India, the company announced Monday.
The investment startup backed by Y Combinator, Peak XV Partners and Tiger Global is the most popular stock broking app in India. Groww, which has been profitable throughout the years, initially moved bases to the U.S. for better access to American investors and capital.
Founded in 2016, the investment platform was created to enable retail investors to access financial products and services through its web and mobile app available on both iOS and Android.
Four former Flipkart employees Lalit Keshre, Harsh Jain, Ishan Bansal and Neeraj Singh, quit their jobs to start a venture that could make investing easy.
Headquartered in Bangalore, the startup made its move in March and said the “Groww group and its subsidiaries are completely based in India,” according to the CEO and co-founder Keshre who announced the update in a post on X.
This move reflects a broader trend among the startup community, indicating an increasing number of Indian startups, particularly in the fintech sector, are preparing to relocate their overseas holding entities to India to keep up with evolving local regulations and pursue domestic stock listings, TechCrunch reports.
Razorpay, Pine Labs, Zepto, Meesho and Udaan are among the other Indian startups in various stages of deliberations to move base to India.
In the past decade, hundreds of Indian startups, most of them backed by startup accelerator Y Combinator, chose to base their headquarters in the U.S.
Prior to Groww, India’s leading fintech platform PhonePe moved its domicile from Singapore to India in 2022. Backed by Walmart, the firm’s move created a tax implication of nearly $1 billion to the startup’s investors, and Walmart ended up paying most of the tax.
A domicile shift creates a tax event for both the startup and its investors.
TechCrunch reports one major reason for startups returning to India is the potential for better analyst coverage – the act of analysts’ reviewing and reporting on a company’s business and suggesting buying or selling – something that’s crucial for attracting institutional investors to companies.