Razorpay to Reverse-Flip Parent Entity to India; Plans IPO

India-born fintech startup Razorpay, which is currently incorporated in the US, has announced plans to reverse-flip its parent entity back to India in the next six months. Co-founder and CEO Harshil Mathur shared that the company is awaiting the necessary approvals for the process, which could take anywhere between 3 to 6 months.

Following the reverse flip, Razorpay expects to require 6-8 quarters of clean financials before considering an initial public offering (IPO). This means the company is likely to go public in at least two years.

Harshil Mathur stated that the reverse-flip process is expected to incur a tax outgo with payments to US authorities based on the company’s market valuation at the time of approval. Razorpay was last valued at $7.5 billion following its Series F funding round in 2021 and is optimistic about this move.

Razorpay’s Financial Performance and Global Expansion

Razorpay’s financials show strong growth, with its total income for FY 2023-24 reaching ₹2,501 crore, up from ₹2,293 crore the previous year. The company’s net profit surged to ₹34 crore, up from ₹7 crore. Online payments, its primary business, now contribute 75% of total revenue and are expected to grow at a 50% CAGR over the next few years.

The company’s offline payments and RazorpayX neo-banking business each contribute around 10-12% of total revenue. Razorpay also has international operations in the UAE and Malaysia and plans to expand into Singapore and other Southeast Asian markets in the near future. Despite its expansion, Razorpay aims for profitability in its new business verticals within 1-1.5 years, with a strong balance sheet that negates the need for immediate fund-raising.

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