‘How the tables turn’: Zerodha’s Nithin Kamath hails ‘ghar-wapsi’ as Indian firms flip back to home turf

Indian corporations that when included overseas to construct merchandise for the native market are actually making their method again residence. Zerodha co-founder Nithin Kamath referred to this development in a publish on X as a ‘ghar-wapsi,’ signaling the reversal of a problem he raised three years in the past. 

“Three years in the past, I shared the issue of Indian corporations constructing for India however incorporating outdoors the nation. Now, issues are the opposite method round. How the tables flip!” he wrote.

This shift comes at a time when the variety of Indian companies with a market cap exceeding $1 billion is at an all-time excessive, and the nation’s inventory market has witnessed a large surge in retail participation, with 10 crore distinctive traders in comparison with simply 3 crore in 2020. 

“Because of the bull market and the convenience of going public, there is a ‘ghar-wapsi’ of Indian corporations included outdoors,” Kamath wrote. “So as to add to this, the Ministry of Company Affairs formally opened the doorways of ‘reverse flipping’ or coming residence to India yesterday”. 

The MCA has amended its Corporations (Compromises, Preparations, and Amalgamations) Modification Guidelines, setting compliance necessities for corporations searching for to relocate again to Indian shores. These embrace acquiring prior approval from the Reserve Financial institution of India (RBI) and fulfilling the provisions of Part 233 of the Corporations Act. Moreover, an utility should be submitted to the Central authorities to finish the method.

Reverse flipping, which refers to an organization’s return to its residence nation for regulatory or tax advantages, has grow to be a worldwide development. 

Kamath pointed to a current report by Mario Draghi, the previous president of the European Central Financial institution, that mentioned almost 30% of unicorns based in Europe between 2008 and 2021 shifted their headquarters overseas, primarily to the US. 

India now sees an identical development in reverse, as corporations acknowledge the rising potential of the home market whereas benefiting from native regulatory adjustments.