Nithin Kamath: Indian companies are returning home, small investors have turned the wheel of time

Reverse Flipping of Companies: There was a time when there was a competition among Indian companies to do business in places like Singapore and Dubai. These companies were working in India but had set up their headquarters outside the country. Now the boom in the Indian economy and stock market has encouraged them to return home. Indian businessmen now want to set up companies in India and do business here. Zerodha CEO Nithin Kamath calls it homecoming. He says that small investors have made huge investments and forced such companies to think about returning home. The wheel of time has now turned.

Companies wanted to work for India while sitting outside the country

Nitin Kamath wrote on the social media platform X that three years ago I had said that Indian companies want to work for India while sitting outside the country. This was a big problem. Now the tables have turned. Things are changing. The participation of retail investors in the country’s stock market has increased rapidly. In the year 2020, there were 3 crore retail investors, which have now increased to more than 10 crore. Nitin Kamath said that there is a competition among companies to enter the stock market. The Ministry of Corporate Affairs has also made it easier for Indian companies to return home or reverse flipping.

Ministry of Corporate Affairs has made the way for reverse flipping easier

The Ministry of Corporate Affairs has improved things by making changes in the Companies Act a day ago. Now the rules for approval of the Central Government along with the permission of the Reserve Bank of India (RBI) have also been changed. Nitin Kamat wrote that according to the report of former European Central Bank President Mario Draghi, 30 percent of the unicorns formed between 2008 and 2021 have shifted to other places including America. He said that on the contrary, Indian companies are now seeing benefits in returning to India.

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The number of companies with a market cap >$1 billion is at an all-time high. Along with this, the allocation of Indian households’ investments in the stock market has also increased substantially. There are now 10 crore unique investors, compared to 3 crore in 2020. Thanks to… pic.twitter.com/E5WS6O4B9P

— Nithin Kamath (@Nithin0dha) September 11, 2024

Know what reverse flipping means?

The Ministry of Corporate Affairs on behalf of the central government has also said that reverse flipping is gaining momentum in the country at this time and with this, a trend of start-ups and established businesses returning to India is being seen. Reverse flipping can be understood as when companies have previously established business outside the country (especially America and Singapore) but now they are returning back to their home country. The reason behind this is considered to be getting local regulatory, tax and investment benefits.

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