Indian stock trading and mutual fund startup Grow paid $159.4 million in taxes when it moved its domicile back to India from the US, the company said in a statement on Monday.
Nearly a dozen Indian startups are moving their headquarters to India from the US and Singapore to better comply with Indian laws and facilitate IPOs in the country. A change of residence creates a tax event for both investors and startups.
While the IPO market remains depressed in the US and many developed markets, India has emerged as a hotbed for initial public offerings this year. Around 70 IPOs took place in India in the first nine months of 2024, already the second-highest number of IPOs in the past calendar year.
One of the key reasons for the influx of startups coming back to India is that even companies with valuations below $2 billion can enjoy better analyst coverage. This coverage is very important for attracting institutional investors. Over the past decade, hundreds of Indian startups, many backed by accelerator Y Combinator, have chosen to locate their headquarters in the US.