Delta Corp experienced a noteworthy surge of over 6 percent on December 1, propelled by its announcement of venturing into the real estate sector through a strategic joint venture with Peninsula Land. In this collaboration, Delta Corp is set to invest Rs 99.99 crore in Peninsula Land, acquiring 1.5 crore equity shares and 77.27 lakh Compulsorily Convertible Debentures (CCDs) at Rs 44 per share. Furthermore, the two entities will embark on a joint venture amounting to Rs 250 crore, with Delta Corp holding a major stake, as outlined in a regulatory filing.
This strategic move comes as Delta Corp navigates challenges in its gaming segment, with a 30 percent decline in its stock value so far in 2023. The underperformance stands in stark contrast to the benchmark Nifty, which has witnessed a commendable rise of over 10 percent during the same period. Delta Corp acknowledged the deferral of its flagship project in Dhargalim, Goa, and, leveraging its free reserves and cash flows, identified a compelling opportunity for sustained growth in the real estate sector.
As of 9:33 am on December 1, Delta Corp shares were trading at Rs 150.20 on the National Stock Exchange, reflecting a 6.04 percent increase. Despite this positive development, the stock has faced a challenging year, with a 30 percent decline. The recent move into real estate is a strategic shift for Delta Corp, showcasing its adaptability to explore diverse avenues for growth.
Over the past six months, Delta Corp's stock witnessed a substantial slump, plummeting around 38 percent. The company's subsidiaries, including Deltatech Gaming, Casino Deltin Denzong, Highstreet Cruises, and Delta Pleasure Cruises, faced tax notices following the GST council's imposition of a 28 percent tax on online gaming and gambling companies. The aggregate tax shortfall liability for Delta Corp amounted to Rs 23,206 crore.
On September 22, the Directorate General of GST Intelligence in Hyderabad issued three demand notices, including one for over Rs 628 crore, pertaining to the tax shortfall in relation to Casino Deltin Denzong based in Sikkim. Subsequently, on October 14, Delta Corp informed stock exchanges that its subsidiary Deltatech Gaming Limited had received intimation for payment of Rs 6,236.81 crore for the tax shortfall.
Recent developments provided a glimmer of relief for Delta Corp, as its stock soared by up to 10 percent in the previous session. Reports suggested that the Calcutta High Court granted interim protection to the company in response to a Rs 6,000-crore show-cause notice issued by the Directorate General of GST Intelligence in Kolkata. This legal respite contributes to the evolving narrative of Delta Corp's efforts to address regulatory challenges and revitalize its market standing.
The joint venture foray into real estate with Peninsula Land adds a new dimension to Delta Corp's business portfolio, signaling a strategic diversification amid ongoing challenges in the gaming sector. As the company seeks to harness long-term growth opportunities, these strategic moves underscore its resilience and adaptability in navigating a dynamic and evolving business landscape.
