Delta Corp Limited, one of the leading players in India’s gaming industry, recently annonced its plan to divest its Caravella Entertainment Private Limited (CEPL), which holds an 89.29% stake in Deltin Nepal Private Limited (DNPL).
The listed gaming and hospitality firm, Delta Corp Limited, has sold its entire stake to Kolkata-based gaming company Ability Games (operator of gaming website 11wickets, promoter of online game development company Yudiz Solutions and sports-content platform Crictracker) and Ashtek Consultancy Private Limited. The sale is valued at a total value of Rs 80 crores, including Rs 18 crores of parent debt and Rs 62 crores of equity value. The sale agreement was finalized on 20th February this year and is expected to be completed by 8th March. Even after the completion of the deal, Deltin Nepal Private Limited will continue using the “Deltin Casino International” and other related trademarks for a transition period of two years.
Delta Corp’s move comes at a time when the Indian gaming industry is reeling under the hefty 28% GST. The implementation of 28% GST from October 2023 is one of the main challenges for the companies in the Indian casino industry. Delta Corp and its subsidiaries are currently facing GST show-cause notices worth over Rs 23,000 crores from the Directorate General of GST Intelligence (DGGI). The High Courts of Calcutta, Bombay (Goa Bench) and Sikkim have however granted interim relief to the brand against any coercive steps in the matters. However, the final verdict in these proceedings is yet to come.
Delta Corp faced these challenges in its strategic planning when it was aiming to expand its real estate business in Goa and Mumbai. For this, Delta Corp is planning to collaborate with Peninsula Land Limited and will invest around Rs 250 crores. This plan of diversifying their business ventures seems to be the reason for finalizing this deal. However, according to Delta Corp Limited, the goal here is to optimize its portfolio and enhance its shareholder value.
Glance At The Key Details Of The Deal
Companies involved in this deal have made an agreement on 20th February, and if everything goes as planned, the deal will be completed on 8th March 2024. Delta Corp Limited is set to receive Rs 62 crores from the sale. The amount shows a possibility of a profitable Return On Investment, this time for Delta Corp Limited.
Ability Games Limited and Ashtek Consultancy Private Limited are the buyers in this deal. They have been identified as independent entities and have no connection to Delta Corp’s promoter or group companies. Also, the deal doesn’t fall into the related party transaction category, which reflects transparency in all the regulatory measures.
After the sale, Deltin Nepal Private Limited (DNPL) will keep the right to use Deltin Casino International trademarks for up to 2 years. To continue their brand recognition and smooth transition, this strategy seems to be working.
Now, as the Indian gaming industry is growing exponentially, Delta Corp is working nonstop to enhance their shareholder value in the market. This change can become a major turnover in the near future and affect their business in many ways. More news is yet to come, so let’s see what happens next with Delta Corp.
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