Highlights
Dream11 Parent Company, Dream Sports Inc., Moves Domicile to India
Dream Sports Inc., the parent company of Dream11, has officially moved its domicile from the United States to India. This significant development follows the introduction of a streamlined method for a reverse merger.
Approval of the Merger
In January, the board of Dream11 India approved a special resolution for merging Dream Sports Inc. with Sporta Technologies Private Limited. This action was taken in accordance with Section 233 of the Companies Act, 2013, as revealed in their regulatory filing obtained from the Registrar of Companies.
Under the amalgamation process, all shares of Dream Sports Inc. will be transferred to Sporta Technologies Private Limited, which operates Dream11 in India. The company stated, “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.”
Fast-Track Route for Cross-Border Mergers
Last year, an amendment was implemented to provide a fast-track route under Section 233 of the Companies Act, 2013. This method eliminates the need for NCLT (National Company Law Tribunal) approval for specific cross-border mergers between an overseas holding company and its Indian subsidiary, pending Reserve Bank of India (RBI) approval.
GST Issues and Legal Relief
In relevant developments, the Director General of Goods and Services Tax (DGGI) issued demand notices exceeding Rs 1.12 lakh crore to Dream11 and various gaming firms, enforcing a 28% tax on the entire face value of player collections on real gaming platforms, rather than an 18% tax on their revenue. Following numerous appeals from the gaming sector, the Supreme Court of India granted temporary relief by staying the GST show-cause notices served to multiple online gaming companies.
Financial Performance of Dream11
Dream11 has yet to file its annual statements for the fiscal year 2024. However, during the financial year ending March 2023, the company reported a remarkable 66% year-on-year growth, achieving revenues of Rs 6,384 crore, with profits amounting to Rs 188 crore.
Joining the Trend of Domicile Relocation
With this move, Dream11 now aligns itself with companies like Zepto, Groww, and PhonePe, which have also shifted their domicile to India. Additionally, other firms such as Flipkart, KreditBee, Pine Labs, Razorpay, and Meesho have been pursuing reverse flip initiatives.