Gurugram-based Deltatech Gaming plans to go public by the year-end, says Jaydev Mody, Chairman, Delta Corp Ltd.
“We are in touch with merchant bankers and meeting with various investors. Roadshows are starting and going into November. We hope to launch soon after that. We think we can finish the entire IPO process by the end of this year,” Mody said in an exclusive conversation with Udayan Mukherjee, global business editor, Business Today TV.
Deltatech Gaming's Rs 550-crore issue comprises a fresh issue of equity shares worth up to Rs 300 crore and an offer-for-sale (OFS) of Rs 250 crore by promoter Delta Corp Ltd. It is a subsidiary of the Mumbai-headquartered Delta Corp, which has been in the casino business for over a decade. Delta Corp is the only listed company engaged in the casino (live, electronic and online) gaming industry in India. The company is engaged in diversified segments like casino gaming, online gaming, hospitality, and real estate.
Proceeds worth Rs 150 crore from the fresh issuance will be utilised for organic growth through marketing and business promotion activities, to attract new gamers and retain the existing ones, Rs 50 crore will be used for strengthening the technology infrastructure to develop new capabilities, maintain and manage its existing platform and general corporate purposes.
Talking about the future plans of the company, Mody said, “we are seriously making a lot of effort to grow our online business in the multi-gaming platform and in the real money gaming space.”
Commenting on the regulation of online gaming business in India, Mody said there are many illegal gaming sites that are currently operating in the country, with some of them from overseas, are unlicensed and unregulated, as well don't pay taxes.
“I think we are already paying 28 per cent GST for casinos. But the online gaming space pays 18 per cent and horse racing pays 28 per cent. It's the method that is important and if the government rationalises, all these three industries can really grow,” Mody added.
Delta Corp filed a writ petition with the Bombay High Court in December 2018 in the hope of receiving a casino license in the Union Territory of Daman & Diu. The company opened its five-star resort, the Deltin in Daman through its subsidiary Daman Hospitality Pvt Ltd, with plans to launch casino operations. “If we get an order in our favour, we can start within 30 days and it will be a huge benefit for Delta because we think that Daman can do at least 20 per cent of what our current top line is and contribute a lot to our bottom line,” Mody said.
On being asked about the return ratios in the hospitality business, Mody said, “We only like to do a hotel, where we run the gaming casino business. Because we need to house our players and a hotel is an integral part of that. The hotel business doesn't make money with land prices and the cost of construction rising, especially during the Covid era. It just doesn't make sense. But, it's crucial to our gaming business.”
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