In recent years, Indian startups have increasingly looked to reverse flip mergers as a strategic move to realign operations with the Indian regulatory and investment landscape. Corporate restructuring is reshaping India's business scene at a fast clip.
In recent years, Indian startups have increasingly looked to reverse flip mergers as a strategic move to realign operations with the Indian regulatory and investment landscape. Corporate restructuring is reshaping India's business scene at a fast clip.
More companies are using new methods to realign their growth paths. One rising trend is the reverse flip merger. This move is changing how startups and big firms approach going public. While the trend of flipping — where Indian companies establish holding entities in foreign jurisdictions — gained momentum over the past decade, a countermovement is now visible. More and more startups are choosing to come back home.
A new wave of reverse flip mergers is taking shape, where companies that once moved their headquarters abroad are now restructuring to bring their parent entities back to India. Startups like PhonePe, Groww and, most recently, Dream11 are leading this quiet but powerful shift. It's not just about national pride — it's a smart, strategic response to how India's regulatory landscape, investor interest and IPO environment are maturing.
These deals are changing how startups and big companies operate. Dream11, a leader in fantasy sports, chose this path to reshape its business. Its move offers lessons for many Indian companies looking to expand and strengthen their market position. Its recent overhaul shines a spotlight on this strategy, showing its rising role in India.
In this Article, we unpack why this reverse-flip trend is gaining traction, what it really means for startups and how Dream11's recent move reflects a broader change in how Indian founders are thinking about building and growing.
What's Reverse Flip Merger?
A reverse flip merger occurs when a startup that had earlier shifted its parent company abroad — often incorporating a holding entity in jurisdictions like the US or Singapore to attract global capital or benefit from favourable regulations — restructures to bring its main holding entity back to India. This move allows founders to simplify operations, align with local regulations, reduce tax complexities and better position the company for domestic listings and access to Indian investors.
Why Are Indian Startups Choosing To Reverse The Flip?
Regulatory Push For Domestic Incorporation: The Indian government has been actively promoting the idea of Indian-origin unicorns listing domestically. Policies around data sovereignty, control over operations and startup ecosystem incentives are aligning to encourage companies to return.
IPO Preparation and Valuation Alignment: As startups mature and prepare for public listings, many find Indian stock exchanges more accommodating and aligned with their primary consumer and investor base. A domestic structure facilitates easier IPO filing and improves valuation credibility under Indian regulations.
Ease of Compliance And Tax Efficiency: Maintaining overseas structures often attracts complex compliance obligations under FEMA, FDI regulations and transfer pricing. A reverse flip simplifies the structure, reduces taxation leakage and makes operations more transparent.
Access To Indian Capital And Incentives: Domestic incorporation can ease access to Indian capital markets, government grants and tax incentives, such as those under the Startup India programme.
Dream11: A Strategic Restructuring Case Study
Dream11, India's leading fantasy sports platform and the country's first gaming unicorn, is reportedly undertaking a reverse-flip merger to shift its holding structure from a foreign jurisdiction back to India.
Since launching, Dream11 has grown rapidly and now counts many millions of users. It's seen as a leader in the Indian sports gaming market.
Before the restructuring, Dream11 wanted higher valuations, access to more funds and better chances to expand. Its financials showed growth but also a need to refine its capital structure. Going public was a challenge because of Indian regulatory rules, so the company looked for alternative routes.
Timeline, Key Developments: Dream11 originally followed the traditional flip route, setting up its holding company overseas to raise foreign venture capital. Recently, the company initiated efforts to domesticate its structure, reportedly seeking approval from Indian authorities to merge or transfer shareholding to a newly incorporated Indian entity. This move aligns with Dream11's long-term IPO goals, potentially aiming for a domestic listing over the next few years.
Strategic Benefits For Dream11: With the Indian government tightening controls on online gaming and fantasy sports, being domestically incorporated, allows for better responsiveness to legal shifts. Indian institutional investors and mutual funds prefer investing in Indian-incorporated entities, especially when considering IPO participation. Domestic listing may result in higher valuation premiums, especially as Dream11 enjoys significant market share in India’s fantasy sports sector.
Implications Of Reverse Flip Mergers
Despite its benefits, reverse flipping is not without hurdles: Tax implications under Indian law, particularly capital gains, stamp duty and exit taxes for foreign investor.
Regulatory approvals from the RBI, SEBI and tax authorities are often needed. Foreign investor concerns regarding control rights and enforceability of protections under Indian law may create resistance.
This move opens doors for startups eyeing quick growth. Companies can consider reverse mergers to go public fast, while minimising risks. This strategy suits high-growth tech firms that want to raise funds without long delays. It also offers a new option for existing firms wanting to step into the markets.
India's rules mainly favour traditional IPOs, but recent reforms are making reverse mergers easier. Clearer guidelines could make this strategy more accessible. Policymakers need to balance innovation with investor protection, enabling smoother transitions.
Also Read: Talking Point This Week — All Is Well?
The reverse flip merger strategy marks a big moment for India's startup story. Dream11's move to shift its holding structure back to India isn't just a one-off decision — it reflects a growing trend of startups "coming home".
With better policy support, easier access to Indian capital and a stronger trust in local regulations, founders are realising they don't need to look abroad to grow big. If this continues, it could reshape how Indian startups build, scale and go global — all while staying rooted in India.
Author: Rohit Jain, managing partner, Singhania & Co.
Co-author: Lavanya Malhotra, associate, Singhania & Co.
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