The stock of India's largest and only listed casino operator Delta Corp has felt the heat of demonetisation since PM Narendra Modi made the announcement.
The government strike on black money has led to cash shortage among the citizens and the business of gaming and hospitality player Delta Corp is no exception.
Cash-based businesses have felt the effects of cash shortages. Delta Corp owns three offshore casinos in Goa out of a total of six, making it the dominant player in the state, the firm claims on its website. The stock which was trading at Rs 83.4 on 18 May 2016 rose to its 52-week high in a time span of around five months on the back of strong Q1 earnings in August 2016 and announcing plans to operate a casino in Sikkim.
On 26 October 2016, the stock rose to 195.20 level, its 52-week high after the firm reported around eight-fold rise in its net profit to Rs 32 crore. After witnessing some correction during the next few days, the stock fell to Rs 159 on November 4, 2016.
On November 8, 2016, when the government announced demonetisation post market hours, the stock closed at Rs 162.35 level. It fell 36 per cent and closed at Rs 104 level on 16 November 2016.
Cashing in on the fall and betting on the robust performance of the firm during the last one year, ace investor Rakesh Jhunjhunwala (via RARE Enterprises) bought 12.5 lakh shares at an average price of Rs 106.54, NSE bulk data showed on November 17.
Jhunjhunwala and his wife own Rekha already own 1.15 crore and 1.1 crore shares, respectively in the casino company. On 18 November 2016, the stock was trading 4.86 percent or 5.25 points higher on BSE on reports of Jhunjhunwala raising stake in the company.
On Friday, the stock closed 3.43 per cent higher at Rs 116.10 on the BSE.
It has a market cap of Rs 2,720.57 crore on the BSE. It has an earnings per share (EPS) of Rs 3.84 and price to earnings ratio of 30.61.
Founded by Jaydev Mody, Delta Corp started off as a real estate firm and gradually entered the hospitality and gaming segment in 2008.