Rakesh Jhunjhunwala owned more than 10% of Delta Corporation a few years ago.- Since then, however, he has consistently reduced his stake in the company.
Delta Corp is a Mumbai-based casino and leisure company that operates three offshore casinos in Goa.- It is the only publicly traded company in the casino gaming industry in India.
Some shares of Big Bull Rakesh Jhunjhunwala have suffered a major correction in recent months. Last on the list is Delta Corporation, a Mumbai-based casino and leisure company.
Rakesh Jhunjhunwala owned more than 10% of Delta Corp. in 2016. Since then, he has consistently reduced his participation. According to the latest regulatory filings as reported by:
ET nowits stake has now fallen to 6.17%.
The news caused a 7% drop in
Delta Corp is facing the brunt of the Covid-19 pandemic as lockdowns and travel restrictions forced it to close its casinos for several months in 2020 and 2021.
In fact, Delta Corp’s decline was so severe that the company lost two-thirds of its value between the first Covid-19 cases reported in China and when India went into a nationwide lockdown in March 2020.
Since then, the company’s shares have risen more than five times, crossing the ₹300 mark in early April. But the tide turned after the fourth quarter performance was announced.
A 17% drop in net profit to ₹48 crore and marginal revenue growth – destroyed more than a third of its market cap in two months.
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Delta Corp not recovering even after India returns to normal
Delta Corp’s struggle paints a grimy picture of his future. The casino operator painted a bleak view of the fact that its casino gaming division reported a 16% drop in revenue, while the hospitality division’s revenue fell 25%.
By contrast, the company’s online gaming division reported a 19% increase in revenue from the December quarter.
The company’s board said it was optimistic about the company’s performance in the coming year.
28% GST on casino games could be bummer
Earlier in May,
reports suggested that the government’s Group of Ministers (GoM) has agreed to levy 28% GST on casinos, racing courses and online gaming. This decision affects two of Delta Corp’s three divisions, namely casino and online gaming.
Currently only online games with betting attract 28% GST – regular online games with no betting and gambling attract only 18% GST.
That said, the new VAT rate has yet to be submitted and approved by the GST council. If it continues, any potential revenue growth will take a huge margin hit — even before it hits the checkout.
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