New Delhi – IPO-bound e-commerce startup Meesho is set to pay $288 million, or Rs 2,461 crore, in taxes to move its headquarters out from Delaware in the US to India, sources told Moneycontrol. Meesho’s tax bill is among the largest for a startup in recent times, after PhonePe’s hefty $1 billion outgo.
Moneycontrol was first to report back in April 2024 that Meesho will pay around $300 million in taxes as part of its redomiciling. The company had stitched together a round as large as $550-600 million and half of that amount, which was in primary capital and came from Tiger Global, SoftBank and others, was reserved to pay the tax amount, the report had said.
Meesho’s tax bill comes shortly after Moneycontrol reported that the National Company Law Tribunal (NCLT) has cleared Meesho’s application to re-domicile in India in one of the final steps before the company proceeds to file its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) in a few weeks’ time.
As is the standard practice, Meesho will pay the entire amount to the US government as part of the move out.
Meesho did not reply to Moneycontrol’s queries.
One of the largest…
While not directly comparable, Meesho’s $288 million tax bill is among the largest for a startup in recent times after PhonePe’s $1 billion tax liability in 2023. PhonePe, the fintech giant, was domiciled in Singapore earlier.
Similarly, stock broking platform Groww paid $160 million to flip its base back to India. More recently, Moneycontrol exclusively reported that Razorpay paid $150 million to redomicile to India ahead of an IPO in 18-24 months.
IPO ahead
Now that Meesho has received a clearance from the NCLT to demerge with the US-based entity, the company will proceed to merge with the Indian firm and fully complete the process of redomiciling in India.
A complete flip back to India is necessary for Meesho if it wants to list on the bourses here. During its initial days, back in 2017, Y Combinator, an early backer of Meesho, required its portfolio companies to be domiciled outside India so it would be easier for them to secure funding and scale.
Meesho, which began the process of flipping back to India sometime in 2024, has been simultaneously preparing for its IPO, scheduled around Diwali this year.
The company will look to raise as much as $1 billion through an IPO which will value the company at around $10 billion, Moneycontrol had exclusively reported.
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