Razorpay eyes an international boost even as it moves base to India

“We should definitely launch in some new countries this year as we look to expand our business in Southeast Asia and Middle East,” said co-founder and managing director Shashank Kumar.

The Delaware-incorporated company that’s working on changing its domicile to India entered international markets in 2022 by acquiring a majority stake in Mayalsia’s recurring payments provider Curlec.

“We will go deeper on some of the international markets as well as dive into the cross-border flows,” Kumar said. “We expect international business to grow up to 5-10% of our total revenue in 3-5 years.”

For FY22, Razorpay reported a standalone profit of ₹7.38 crore on an operational revenue of ₹1,481.2 crore, up from a profit of ₹6.19 crore and revenue of ₹841.2 crore in the year before. The company has not yet declared its financials for FY23.

Kumar said the company had achieved break-even on its payments gateway business, but newer products are yet to become profitable. Razorpay is backed by Lightspeed, Tiger Global and Peak XV Partners, among other investors, and was last valued at close to $7.5 billion in 2021.

“On the new lines of business—like neo-banking business (around payroll and vendor payments) and marketing stack (such as dynamic QR code) and offline business (point of sale devices) that we are investing in—all of these are still not at breakeven,” Kumar said. “Over the next 2 years, we want to hit our goal to ensure we are in the black in all of these lines before we go for a listing.”

Razorpay has kickstarted the process of shifting its domicile to India as it seeks to list on domestic bourses. The process is expected to take 6-12 months, pending approvals from US regulators over tax and Indian regulators such as RBI. 

Razorpay has made provisions for a tax outgo on its books, Kumar said. “We will come to know about the exact tax amount that needs to be paid in due course. We have accounted for some of it and hopefully it should be in that range,” Kumar said.

PhonePe last year said its investors had to pay ₹8,000 crore in taxes for shifting its domicile from Singapore to India.

Razorpay, in the meantime, has seen a spike in onboarding merchants since it received its payments aggregator license in December. The Reserve Bank of India had asked Razorpay and some other companies to not onboard merchants till they received their final payments aggregator license. 

Since December, Razorpay has onboarded more than 3 times the number of merchants it had on its platform previously, Kumar said. 

Last week, the company said it had crossed a total payment volume of $150 billion. Razorpay also said it had launched a payment gateway product and was working on incorporating artificial intelligence solutions across its product stack.