Dream11 Takes Fast Lane To Complete ‘Ghar Wapsi’

Gaming unicorn Dream11 has announced its “ghar wapsi”, becoming the latest startup to move its domicile to India from overseas. 

On January 6, the startup’s board of directors approved the merger of its US entity, Dream Sports Inc, with its India entity, Sporta Technologies Pvt Ltd. 

In what is perhaps a first for the Indian startup ecosystem, Dream11 leveraged the recently implemented fast-track mechanism to complete its reverse migration. 

As per its filing with the MCA, Dream11’s board passed the resolution for merging its two entities under Section 233 of the Companies Act, 2013. 

In an amendment last September, the Centre fast tracked the reverse flip process for specific categories of companies, allowing mergers and amalgamations without involving the National Company Law Tribunal (NCLT). Instead, companies can now seek the approval of the regional director of the MCA. 

While Dream11 declined to comment on Inc42’s queries on the merger earlier this month, its spokesperson said in a statement today, “Dream Sports is leveraging tech to unlock the massive potential of India’s sports ecosystem. We have completed a ‘ghar waapsi’ and are now an Indian domiciled business.” 

What Led To The Change In Domicile? 

While most startups, including PhonePe, Groww, Zepto, Flipkart, Razorpay, among others, moved their domicile to India or are in the process of doing so with an eye on going public India, there is no clarity on Dream11’s public listing plans so far.

However, in an explanatory statement filed with the MCA, Dream11 said it reverse flipped to India for the following reasons:

• Give the shareholders of the US entity direct participation in the Indian entity, where a majority of the startup’s operations are based out of. 
• Cut costs with more operational efficiency as the merger effectively eliminates inter-company transactions. 
• Reduction in compliances and regulatory overheads. 
• Simplification of the Dream11’s overall group structure for a more efficient management. 

It is pertinent to mention that reports said in 2021 that Dream11’s US entity, Dream Sports, would go for a listing in the US by 2022 to raise $1.5 Bn. However, this didn’t pan out. 

Currently, Dream11’s shares in the grey market are trading at about INR 5.88 Lakh apiece, as per investing platform Planify.

Dream11’s India Focus

Dream11’s reverse flip came a few weeks before the start of IPL 2025. The startup, which is engaged in real-money gaming business, sees a large chunk of its business come during the IPL.

It onboarded 1.1 Mn users on the very first day of IPL’s 2024 season. Back then, Dream11 cofounder and “culture enforcement officer” Harsh Jain took to X to announce the number of users. Besides new users, the fantasy sports platform also saw 15.01 Mn concurrent users.

This year, too, the fantasy sports startup seems to be leaving no stone unturned to capitalise on the marquee cricket tournament. The startup has roped in actors Aamir Khan and Ranbir Kapoor, and cricketers Rohit Sharma, Hardik Pandya, KL Rahul, Jasprit Bumrah, Suryakumar Yadav, Rishabh Pant, and R Ashwin for its IPL ad campaign this year. 

Dream11 allows users to create fantasy teams of real-life players and earn points based on their on field performance in various sports to win cash prizes. 

Being a real-money game, the startup, like other players in the sector, has been reeling under the 28% GST regime imposed on full-face value of the bets. 

In October 2023, the Directorate General of Goods and Services Tax Intelligence (DGGI), Mumbai Zone, issued an INR 28,000 Cr GST notice to Dream11. The total tax claim amount against Dream11 has been pegged at around INR 40,000 Cr.

However, the only silver lining for the company has been its profitable show. The gaming unicorn saw a 32% jump in its net profit to INR 187.83 Cr in the financial year 2022-2023 (FY23) from INR 141.97 Cr in the previous fiscal year. Revenue from operations also zoomed 66% to INR 6,384.49 Cr in the fiscal under review from INR 3,840.75 Cr in FY23.

However, the company is yet to disclose its financials for FY24, the fiscal year when the 28% GST regime came into effect. On top of this, industry bodies reportedly estimate a further 10% year-on-year (YoY) decline in revenues for the overall gaming sector in FY25 due to the tax woes. 

Nevertheless, despite the GST burden, Jain has maintained that the startup will continue to be focussed on the Indian market. Speaking at the ‘Startup Mahakumbh’ last year, he said there are enough opportunities for Dream11 in India, and thus, it has no plans to expand internationally. 

“A lot of people have asked why we don’t go global. My answer has always been why? We have a very unique advantage. We have a domestic market which is one-sixth of the world’s population. As an Indian, you have a huge advantage,” he said.