Mumbai, September 25, 2023 – Delta Corp Ltd., the leading casino operator in India, is grappling with a dire financial situation after its stock witnessed a sharp decline of 23 percent in the month of July. This alarming downturn in the company’s stock value can be attributed to a swift revision by the GST council, which saw the GST rates on casinos soar from 18 percent to a staggering 28 percent.
The repercussions of this GST revision have been profound. Currently, Delta Corp’s shares are locked in a circuit breaker, experiencing a steep 20 percent decline. Adding to the company’s woes, tax notices totaling a staggering Rs 16,822 crore were delivered by the Directorate General of GST Intelligence on a fateful Friday. These notices pertain to the period spanning from July 2017 to March 2022.
The stock, battered by this combination of factors, has plummeted to its lowest point in the past 33 months, with a severe impact on investors and stakeholders alike. The tax notices, which have been issued separately, comprise an initial notice of Rs 11,140 crore directed at Delta Corp itself, and a second notice amounting to Rs 5,682 crore targeting three of its subsidiaries—Casino Deltin Denzong, Highstreet Cruises, and Delta Pleasure Cruises.
In response to these challenges, Delta Corp has filed a submission with the stock exchange, asserting that the GST demand has been calculated based on the gross bet value rather than the gross gaming value. The company has expressed its intention to explore legal avenues to challenge this order, highlighting that such tax demands are not unique to Delta Corp but are a shared concern within the industry.
It’s important to note that the stock is currently under the Futures and Options (F&O) ban, which means that no new positions can be initiated in the stock, further limiting trading options for investors.
Reflecting on the events of July, the sharp decline on July 12th resulted in a staggering erosion of the company’s market capitalization, amounting to Rs 1,500 crore. This figure surpasses the company’s entire revenue for the entire financial year of 2023, which amounted to Rs 1,021 crore.
Additionally, a significant block deal shook the stock market as 1.6 crore shares, equivalent to 6.1 percent of the total equity, changed hands in a block deal. While the identities of the buyers and sellers remain undisclosed, the transaction’s estimated value stands at approximately Rs 236 crore.
Delta Corp now faces an uphill battle to navigate these challenging circumstances, with both legal and financial challenges looming large. The fate of one of India’s leading casino operators remains uncertain as it attempts to weather this unprecedented storm in the midst of regulatory changes and substantial tax demands.
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