Fintech start-up Pine Labs has received the approval of the National Company Law Tribunal (NCLT) to merge its entities in India and Singapore. This was first reported by The Arc.
The approval was reportedly granted to the start-up on August 12. Now, Pine Labs has to get approval at its stakeholders meeting about the shift to India. Following this, the company needs to get final approval from the NCLT after filing a second motion.
Pine Labs originally registered itself in Singapore in 2013. In May this year, the Singapore court gave approval to the company to move its base from India. Now with the merger in motion, the company's Singapore ownership structure will shift to India.
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Just to simplify the process of a merger, first a company has to get the approval of the board for the merger. Following this, the company should go to the NCLT and inform the tribunal about its decision to go ahead with the merger. This is called the ‘First Motion Application’.
Once the process is admitted by the court, the company needs the approval of other entities like the shareholders. Additionally, several regulatory bodies in the government, such as the Reserve Bank of India, Income Tax Authorities and Registrar of Companies, need to be informed about the merger. This entire process is called the ‘Second Motion Petition’.
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With this merger, Pine Labs is a step closer to shifting its base to India. Additionally, it is reported that this transfer will help improve the economies of scale. As per Moneycontrol, the order reads, “The amalgamation is expected to achieve more cost-saving and more focused operational efforts, rationalization, and standardization of business processes by the way of consolidation of the group.”
As per reports, the company is also eying for an IPO of $1 billion this year. Several start-ups are planning to relocate back to India. This includes Udaan, Meesho, Flipkart and Zepto. The latest start-up that moved its base back to India was Groww. Fintech start-up Groww shifted its domicile from the USA to India in March this year.
Speaking about this trend of start-ups shifting their base back to India, Tracxn co-founder Neha Singh said, “Earlier, it was perceived to be easier to list outside India because investors understood the tech sector better and there was more liquidity. Second, it opened up the M&A market as many requirements were based outside India.”
Singh said that this perception has changed. Now, many companies prefer to get listed in India rather than overseas, she added.
