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 Pvt.

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, Qatar Investment Authority 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 Bengaluru, similar to online retailer and former parent company Flipkart.

It’s an unusual step for an Indian start-up 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.

Related Stories
Flipkart’s new policy gives employees flexibility to pursue non-professional interests
Flipkart’s part work part pay policy is applicable for existing employees who wish to move to a reduced work schedule for a defined period, as well as for new joiners who wish to join directly with this reduced format

Over 8,000 Indian start-ups have incorporated in Singapore since the year 2000, according to a report by India Briefing. PhonePe’s three major moves — relocating to India, carving itself out as a separate entity from Flipkart and raising funds at a high valuation— come at a time when start-up firms around the world are struggling to raise funds and facing deflating valuations.

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 Reserve Bank of India, one of the people said.

The government currently forbids India-headquartered companies from directly listing on overseas exchanges.

India has over 26,000 start-ups making it the world’s third-largest start-up ecosystem according to the Asian Development Bank, and at last count over 100 of these were valued at $1 billion, making them unicorns.