Reverse flipping in India: why 8 startups and Bay Capital see a market alignment

Reverse flipping, where companies shift their legal domicile back to India, is gaining momentum with at least eight startups, including Zepto, Flipkart, Meesho, and Razorpay, planning such moves in 2025.

Bay Capital, a major investor with $1 billion committed to Indian startups, views this trend as a clear sign of alignment among India’s capital markets, investors, regulators, and founders.

"Reverse flipping is not a passing phase. It’s a sign that India’s capital markets, investors, regulators and founders are aligned," said Keyur Majmudar, managing partner and CIO of Bay Capital Investments.

This shift reflects growing confidence in India’s ecosystem, bolstered by the booming AI startup sector, which attracted over $1.2 billion by 2024, marking a 4.4x growth since 2020.

The reverse flipping trend is expected to enhance access to domestic capital markets and regulatory benefits, while signaling India’s rising stature as a global startup hub.

Bay Capital’s significant investment underscores the firm’s commitment to India’s innovation landscape and the evolving market dynamics favoring local incorporation.

As startups increasingly opt for reverse flipping, the move could reshape India’s startup funding and regulatory environment, fostering stronger domestic investor participation and long-term growth.

At least eight startups, including Zepto, Flipkart, Meesho, and Razorpay, plan reverse flipping to India in 2025, reflecting a market alignment among investors, regulators, and founders, says Bay Capital, which has invested $1 billion in Indian startups amid booming AI sector growth.