Gearing Up For IPO, Razorpay Converts Into Public Entity

SUMMARY

Razorpay got the approval of its members during an EGM held on March 27 to change its name to ‘Razorpay Software Limited’ from ‘Razorpay Software Private Limited’

While the startup has no immediate plans for IPO, the conversion is a step in preparation for the public listing

Razorpay is also in the process of moving its base to India, and said that the regional director of the MCA in Hyderabad cleared the merger of Razorpay Inc with Razorpay India in February

Fintech unicorn Razorpay has converted into a public company, a crucial step in preparation for its initial public offering (IPO).

As per its regulatory filing, the startup got the approval of its members at an extraordinary general meeting held on March 27 to change its name to ‘Razorpay Software Limited’ from ‘Razorpay Software Private Limited’.

While the startup has no immediate plans for IPO, the conversion is a step in preparation for it.

“As part of our redomiciling to India, we’re initiating the process to become a public company well before our IPO in approximately two years, in order to align with best governance practices and build early readiness,” Razorpay told Inc42 in a statement.

The development was first reported by Entrackr.

Razorpay Takes Another Step Towards Ghar Wapsi

As part of its IPO preparations, the startup has initiated the process of moving its base to India from the US.

In the filing, the fintech startup said that the regional director of the corporate affairs ministry in Hyderabad cleared the merger of Razorpay Inc with Razorpay India in February.

Founded in 2014 by Shashank Kumar and Harshil Mathur, Razorpay is an omnichannel payments and banking platform. Over the years, the startup has forayed into SME payroll management, banking, lending, payments, insurance, among others.

The Bengaluru-based startup has raised over $739 Mn in funding till date and counts the likes of Tiger Global, Y Combinator, GIC, Matrix Partners India, and Peak XV Partners among its backers.

Reports surfaced earlier that Razorpay was undertaking a major restructuring exercise, looking to bring its six Indian units under the umbrella of Razorpay Software India. Upon completion of the restructuring, Razorpay will likely have to cough up $200 Mn in taxes to the US government.

Razorpay’s consolidated net profit more than quadrupled to INR 33.5 Cr in the financial year 2023-24 (FY24) from INR 7.2 Cr in the previous fiscal year. Operating revenue rose 9% to INR 2,475 Cr during the year under review from INR 2,283 Cr in FY23.

Fintech Startups Making Beeline For Bourses

Razorpay is not the only new-age fintech company gearing up for an IPO. Pine Labs CEO Amrish Rau said last month that the company plans to float its IPO in the second half of 2025. In the run up to its public market debut, Pine Labs got the nod from the NCLT, earlier this month, to ‘reverse flip’ to India from Singapore.

In November last year, Dutch investor Prosus said it aimed to list PayU in 2025. Fintech giants PhonePe and Groww are also in different stages of their IPO preparations. While PhonePe paid over INR 8,000 Cr in taxes in India as part of its reverse flip from Singapore, Groww paid INR 1,360 Cr in taxes to the US government for its homecoming.

It is to be noted that fintech giants Paytm and MobiKwik are already listed companies. While the Vijay Shekhar Sharma-led company went public in 2021, the latter made its public market debut last year.

Beyond IPO aspirations, bringing headquarters back to India makes sense, especially for fintech startups, as it simplifies regulatory compliance. The likes of Razorpay and PayU earn a majority of their revenue from India.