2024 saw India achieve a historic milestone by emerging as the global leader in Initial Public Offering (“IPO“) activity. 327 companies went public in India, raising a total of $19.9 billion – nearly double the number of IPOs in the United States and two-and-a-half times more than in Europe.[1]
Buoyant Indian IPO market
This trend positions India as a dominant force in the Asia-Pacific region, with its IPO market poised for continued robust growth, building on the record-breaking momentum of 2024.
Following the successful completion of the schemes of arrangement in relation to Pine Labs and Kiranakart, the corporate restructuring method of ‘reverse flipping’ has emerged as a promising strategy for Singapore holding companies with Indian operations looking to raise capital by listing their shares on Indian stock exchanges. Singapore-based start-ups KreditBee,[2] Eruditus[3] and Udaan[4] are reportedly also planning moves to India.
Understanding ‘Reverse Flipping’
A ‘reverse flip’ in the context of an Indian IPO refers to a type of cross-border corporate transaction which typically involves:
- a Singapore-incorporated parent company (the “SG HoldCo“) transferring its entire undertaking, property and liabilities to its India-incorporated subsidiary (the “Indian SubCo“);
- the Indian SubCo allotting and issuing shares to shareholders of the SG HoldCo in exchange for shares in the SG HoldCo, effectively ‘merging’ both companies; and
- the SG HoldCo being dissolved (i.e. it ceases to exist as a separate entity under the Singapore Companies Act[5]), resulting in the Indian SubCo being the sole surviving entity post-transaction.
Diagram showing a ‘reverse flip’ transaction
Companies intending to proceed with a ‘reverse flip’ should note that it is a voluntary process given that shareholder consents must be obtained by the SG HoldCo and the Indian SubCo (as elaborated below).
Steps for ‘Reverse Flipping’
The general steps for effecting a ‘reverse flip’ on behalf of the Sg HoldCo are as follows:
| Step | Actions Required |
| 1. | The SG HoldCo files an application to the General Division of the High Court of Singapore for leave to convene a meeting of members (the “Scheme Meeting“) for the purpose of considering and, if thought fit, approving the scheme of arrangement to effect a ‘merger’ of the SG HoldCo with the Indian SubCo (the “Scheme“).[6] The SG HoldCo and Indian SubCo would also typically enter into an implementation agreement, which sets out the terms and conditions on which the Scheme will be carried out (the “Implementation Agreement“). |
| 2. | After the Court consents to the convening of the Scheme Meeting, the SG HoldCo sends a notice of the Scheme Meeting to its members containing a statement explaining the effect of the arrangement (including any material interests of the directors) and the place and manner in which the Scheme Meeting is to be conducted,[7] along with the Implementation Agreement, requisite attendance forms, proxy forms and other ancillary documents attached thereto. |
| 3. | The SG HoldCo convenes the Scheme Meeting (and any adjourned meetings thereof). The Scheme is binding on the SG HoldCo and all members (including dissenting and non-voting members) if a majority in number (i.e. more than 50%) together representing three fourths (i.e. at least 75%) in value of the members present and voting at the Scheme Meeting approve the Scheme.[8] |
| 4. | After the Scheme is approved by its members, the SG HoldCo must apply to the Court for an order (the “S210 Order“) sanctioning the Scheme.[9] The Court may grant its approval subject to such alterations or conditions as it thinks just.[10] At this stage, the SG HoldCo and the Indian SubCo may also make a joint application for the following court orders to facilitate implementation of the Scheme (the “S212 Order“):[11] (a) the transfer to the Indian SubCo of the whole or any part of the undertaking and of the property or liabilities of the SG HoldCo; (b) the allotting or appropriation by the Indian SubCo of any shares, debentures, policies or other like interests in the Indian SubCo; (c) the continuation by or against the Indian SubCo of any legal proceedings pending by or against the SG HoldCo; (d) the dissolution, without winding up, of the SG HoldCo; (e) the provision to be made for any persons who, within such time and in such manner as the Court directs, dissent from the compromise or arrangement; (f) such incidental, consequential and supplemental matters as are necessary to secure that the Scheme is fully and effectively carried out. |
| 5. | Upon the S210 Order being granted, a copy of such Order must be lodged with the Accounting and Corporate Regulatory Authority of Singapore (“ACRA“), after which it takes effect on and from the date of lodgement or such earlier date as the Court may determine and as may be specified in the order.[12] Every company in relation to which the S212 Order is made must lodge within 7 days of the making of the order, a copy of such Order with ACRA, and if applicable, the appropriate authority concerned with the registration or recording of dealings in land.[13] |
In addition to the Singapore scheme process provided above, parties should also bear in mind that formalities under Indian law should also be complied with. In particular, the Indian SubCo would have to:
- procure the relevant consents and/or approvals under the Companies Act 2013 of India, cross-border merger regulations (if relevant), and any other applicable provisions;
- file and/or lodge relevant documents with the appropriate Indian authorities and registrars (e.g. filing of the certified copy of the order of the National Company Law Tribunal (NCLT) sanctioning the scheme with the relevant Registrar of Companies in India); and
- register the SG HoldCo members in the register of members of the Indian SubCo.
The timeframe for completing a ‘reverse flip’ from Singapore to India generally ranges from 6 months to 1 year, depending on the complexity of the relevant restructuring.
This bulletin is intended for informational purposes only and does not constitute legal advice. It is based solely on Singapore law and it is not intended to provide guidance on Indian law or the laws of any other jurisdiction.
For further information, please contact:
Daniel Yong, Partner, Withersworldwide
daniel.yong@withersworldwide.com
Endnotes
[1] International Bar Association, “India’s IPO boom” (27 January 2025). Accessible at: https://www.ibanet.org/Indias-IPO-boom
[2] https://www.outlookbusiness.com/corporate/kreditbee-plans-to-move-domicile-to-india-from-singapore-report
[3] https://economictimes.indiatimes.com/tech/startups/eruditus-joins-queue-of-reverse-flips-by-indian-startups-weighs-ipo/articleshow/107035125.cms?from=mdr
[4] https://inc42.com/buzz/homecoming-season-pine-labs-udaan-meesho-move-domicile-india/
[5] The Companies Act 1967 of Singapore (the “CA“).
[6] Section 210(1)(b) of the CA.
[7] Section 211 of the CA.
[8] Sections 210(3AA) and 210(3AB) of the CA.
[9] Section 210(3AB)(c) of the CA.
[10] Section 210(4) of the CA.
[11] Section 212(1) of the CA.
[12] Section 210(5) of the CA.
[13] Section 212(3) of the CA.
