Flipkart gets nod for India residency, one hurdle left

Walmart-controlled Flipkart received a key approval to shift its domicile back to India, a prerequisite for a local listing, in a move that also reflects a shift in India-US economic ties amid prolonged bilateral trade negotiations.

- Dhirendra Kumar

The National Company Law Tribunal (NCLT) approved the re-domiciling scheme on Friday, according to an order reviewed by Mint.

‘The restructuring is fair and not prejudicial to the interests of shareholders or creditors, the tribunal said, while clearing India-based Flipkart Internet Pvt. Ltd’s intra-group amalgamation scheme involving eight Singapore-incorporated entities. The combined entity will be called Flipkart Internet Pvt. Ltd.

The NCLT approval for re-domiciling follows the Singapore High Court’s clearance a few weeks ago. The only remaining requirement is the Press Note 3 (PN3) security clearance, which is necessary under India's foreign direct investment (FDI) rules.

PN3 clearance is needed for overseas investments in sensitive sectors or from countries sharing a land border with India, a move largely targeted at China to curb opportunistic takeovers and acquisitions of Indian companies during the covid-19 pandemic.

Tencent, a Chinese tech company, owns around 5% of Flipkart. US retail giant Walmart Inc holds a controlling stake in Flipkart and exercises full operational and strategic control.