Razorpay IPO: Company to Pay ₹1,245 Crore in Taxes as it Flips Back to India

As per a Moneycontrol report, Razorpay’s IPO is likely within the next 18 to 24 months, following the completion of a major corporate restructuring involving its reverse flip back to India. As part of this process, the fintech unicorn will pay ₹1,245 crore in taxes to the Indian government, using its internal cash reserves. 

This strategic move brings the company’s headquarters under Indian jurisdiction, strengthening its position ahead of the planned public listing. Razorpay’s financial performance remains robust, with 24% growth in revenue and a 4.7 times increase in net profit reported for FY24, despite regulatory challenges during the year.

Razorpay IPO: Reverse Flip Marks a Strategic Shift to Indian Jurisdiction

Razorpay initiated its reverse flip process in May 2023 to align its corporate structure with its long-term listing objectives in India. This involved merging the US-registered holding company with Razorpay Software India. The transition is now officially complete, and the company is once again domiciled in India.

The decision to bring operations entirely under Indian regulation is seen as a move to simplify compliance and signal commitment to the domestic market. The completion of the reverse flip places the company in a stronger position for a future IPO.

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₹1,245 Crore Tax Payment to be Funded from Internal Reserves

As a consequence of the reverse flip, Razorpay is set to pay around ₹1,245 crore in taxes to the Indian government. This tax obligation, estimated at approximately $150 million, will be met through the company's internal reserves. According to reports by Moneycontrol, Razorpay does not intend to raise fresh capital for this purpose.

This approach underlines the fintech firm's strong cash position and financial discipline. The payment ensures compliance with domestic tax laws following the corporate restructuring.

Razorpary IPO Expected Within 18 to 24 Months

Razorpay is preparing for an IPO and aims to go public within the next 18 to 24 months. While investment banks have not yet been appointed, the company is actively working on streamlining operations and ensuring regulatory readiness.

This IPO will likely mark one of the significant listings in the fintech sector and could provide an opportunity for early investors to exit or dilute their stake.

Financial Performance in FY24 Shows Strong Growth

In FY24, Razorpay reported a revenue of ₹2,068 crore from its core payments business, reflecting a growth of 24%. The company’s total income for the fiscal year exceeded ₹2,501 crore. Furthermore, net profit surged 4.7 times to reach ₹35 crore.

Despite regulatory restrictions during the year, including a temporary pause on onboarding new customers, Razorpay remained profitable and demonstrated operational efficiency.

Fintech Outlook Remains Strong Despite Regulatory Hurdles

In the second half of FY24, Razorpay received the final approval for its payment aggregator licence. Prior to this, the company had been directed by the banking regulator to pause the onboarding of new clients.

Even with these challenges, the company delivered consistent growth and maintained its valuation at $7 billion. Its core business in digital payments continues to gain traction in a competitive market.

Razorpay is backed by global and domestic investors, including Y Combinator and Peak XV Partners.

Conclusion

Razorpay’s ₹1,245 crore tax outgo and reverse flip to India mark a pivotal moment in its growth story. With strong financials, regulatory clarity, and an IPO on the horizon, the fintech unicorn is positioning itself for its next chapter in India’s public markets.

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