Groww Investment Platform Pays $160 Million in Tax and Relocates to India
Indian investment platform Groww recently made a significant move by paying $159.4 million in taxes as it shifted its domicile back to India from the U.S. This decision was announced by the company on Monday, showcasing a trend among Indian startups to relocate their overseas holding entities to India.
Founded in 2016, Groww has become the most popular stock broking app in India, catering to retail investors and providing easy access to financial products and services through its web and mobile applications. The startup, which was initially based in the U.S. to attract American investors and capital, has been profitable over the years.
The four former Flipkart employees Lalit Keshre, Harsh Jain, Ishan Bansal, and Neeraj Singh took a leap of faith to create Groww with the mission of simplifying investing for individuals. Headquartered in Bangalore, the company officially moved its base back to India in March, emphasizing that all its subsidiaries are now based in the country.
This shift by Groww mirrors a larger trend in the startup community, especially in the fintech sector, where several Indian startups are considering relocating their holding entities to India to comply with local regulations and potentially pursue domestic stock listings. Companies like Razorpay, Pine Labs, Zepto, Meesho, and Udaan are also contemplating similar moves.
The move by Groww follows the footsteps of PhonePe, another leading fintech platform in India, which relocated its domicile from Singapore to India in 2022. This decision had significant tax implications for the startup’s investors, with Walmart, the platform’s backer, bearing most of the tax burden.
One of the key reasons cited for startups returning to India is the potential for better analyst coverage. Analysts play a crucial role in evaluating and reporting on a company’s performance, which is essential for attracting institutional investors. This move by Groww and other startups highlights the importance of aligning with local regulations and leveraging the advantages of operating in India’s vibrant startup ecosystem.
As Groww embarks on this new chapter in its journey, the company’s decision to relocate its domicile back to India signifies a strategic move to strengthen its presence in the country’s growing investment landscape. With a focus on serving retail investors and providing accessible financial services, Groww’s decision reflects a broader trend of Indian startups realigning their operations to capitalize on the opportunities in the domestic market.
In conclusion, Groww’s decision to pay significant taxes and relocate to India underscores the company’s commitment to its roots and sets a precedent for other startups looking to establish a strong foothold in the Indian market. As the fintech sector continues to evolve, such strategic moves by industry players are expected to shape the future of India’s startup ecosystem, driving innovation and growth in the years to come.
