TIGA Gets CCI Nod To Acquire Stake In Dream11, Tencent To Offload Entire Stake

The Competition Commission of India (CCI) has reportedly approved Singapore-based TIGA Investments’ proposal to acquire a stake in real money gaming major Dream11’s parent Dream Sports Inc. 

The transaction will see Tiga Acquisition Corp III buy some preferred stock of Dream Sports, along with certain rights, from an existing shareholder of Dream Sports, news agency PTI reported. 

“The parties and their respective group entities and affiliates do not have any horizontal overlaps, existing or potential vertical linkages and existing or potential complementary business activities in India,” the publication quoted the competition watchdog as saying. 

The report added that the transaction was notified to the CCI via the green channel route. The CCI started the green channel route in 2019 to speed up the approval process for mergers and acquisitions in India.

Earlier today, Mint reported that Dream11’s backer Tencent Holdings is looking to divest its entire stake in Dream Sports. The report pegged the deal at $150 Mn. 

The report said that the acquisition was triggered by restrictions imposed on Chinese investments. Following the clashes between Indian and Chinese soldiers in 2020, the Indian government has increased the scrutiny on Chinese investment in Indian entities. 

Founded by Harsh Jain and Bhavit Sheth in 2008, Dream11 offers a fantasy gaming platform. For fantasy sports business, the group recognises the platform fee received from users as revenue. Besides its real money gaming offering, the startup also operates sports streaming OTT platform FanCode.

The development comes at a time when Dream11 is looking to double down on its Indian operations. Earlier this year, Dream11 founder and CEO Harsh Jain said that the startup’s focus continues to be on the Indian market as there are enough opportunities and it has no plans to expand globally. 

In its last disclosed financial results, Dream11 posted a 32% surge in its net profit to INR 187.83 Cr in FY23 from INR 141.97 Cr in the previous fiscal year. Operating revenue zoomed 66% to INR 6,384.49 Cr from INR 3,840.75 Cr in FY22. 

The India real money gaming space has around 100 Mn online gamers, including 90 Mn paying to play users, according to a Grant Thornton report. It was the biggest contributor to the broader gaming space in India, accounting for 83-84% of the overall revenue in FY22, the report said.