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Fintech unicorn Razorpayhas initiated the first stage of a multi-layered process to bring its US-based parent entity back to India, two people familiar with the matter told The Economic Times. 

The Y Combinator-backed startup, which has domiciled itself in the US in order to raise funds, confirmed the development in response to queries from The Economic Times.

“They have kicked off the first stage of a multi-layered process to bring its parent entity back to India. It will take time and a good amount of funds, but the management and board are keen on it. This makes sense in a highly regulated sector like financial services,” said the person quoted in the news report, remaining anonymous. 

Razorpay has begun the process of “reverse flipping”, said a person privy to the information.

Razorpay will be the second major startup to shift domicile to India, as the Indian government takes steps to encourage local fintech companies and startups domiciled abroad to relocate to Gujarat International Finance Tech City’s International Financial Services Centre.

Earlier this year, payments firm PhonePe had moved base from Singapore to India in a run-up to public listing plans.

According to another source quoted in the report, the Bengaluru-headquartered digital payments firm could consider a listing in India post relocation. “The plan around its IPO (initial public offering) is still a bit far away, but the priority is to have the company domiciled in India,” said the source.

Backed by Tiger Global, Sequoia Capital India, GIC, Lone Pine Capital, Alkeon Capital, and TCV, Razorpay was valued at around $7.5 billion in its last funding round in December 2021.

The company’s total revenue for the fiscal 2022 jumped 75% to Rs 1,485.7 crore from Rs 844.6 crore.  

The company, which had turned profitable in FY21 on a standalone basis, recorded a profit of Rs 7.3 crore in FY22, up 18%. It is yet to post profits on a consolidated basis.  

In the most recent development, Razorpay was among the 32 entities that received in-principle approval for payment aggregator licence. The fintech platform would also be joining the government’s Open Network for Digital Commerce (ONDC) with its payment reconciliation service for network participants, including buyers, sellers, and logistic providers.