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Bloomberg
Walmart Inc and other PhonePe shareholders will have to pay nearly $1 billion in tax after
the digital payments company shifted its headquarters to India, according to people familiar with the matter.
The bill stems from the relocation and rise in value of PhonePe Pvt, which Walmart took majority ownership of after acquiring parent outfit Flipkart Online Services.
Now separated from Flipkart and re-domiciled from Singapore to India, the fintech firm is raising funds at a $12 billion pre-money valuation from General Atlantic and others, triggering the hefty charge, the people said, declining to be named discussing a private matter.
Investors including Tiger Global Management have now purchased shares of PhonePe in India at the new price, leading to tax implications of roughly 80 billion rupees for existing shareholders, one of the people said.
Representatives of Walmart, Flipkart and Tiger Global did not immediately respond to emails seeking comment.
A PhonePe spokeswoman declined to comment.
PhonePe is shifting its headquarters to Bangalore, similar to online retailer and former parent company Flipkart. It’s an unusual step for an Indian startup to move home. For years, technology companies with the bulk of their operations and business in India have chosen to incorporate in Singapore because of the friendlier tax regime, ease of getting foreign investments and simpler processes for public debuts on foreign exchanges.
PhonePe’s shift could be a precursor to the digital payments company preparing for a stock market listing in India. Any payments firm listed overseas would struggle to get a green light from India’s financial and banking regulator, the RBI.