Shares of Delta Corp, an Indian online gaming company, dropped 20 percent on Wednesday, July 12, to hit its lower circuit, recording the largest single-day drop in three years, following the GST Council’s decision to impose a 28 percent tax rate on gaming, horse racing, and casinos.
During the 50th GST Council meeting on July 11, the Group of Ministers made the decision to impose a 28% goods and services tax (GST) on the entire value of online gaming, horse racing, and casinos, without differentiating between games of skill and chance, Finance Minister Nirmala Sitharaman said.
This decision is expected to be a major setback for the online gaming industry in the country.
During Wednesday’s trade, the stocks of Delta Corp opened at a price of Rs. 222.15 per share against the previous close of Rs. 246.80 per share and fell further during the early trading session to touch an intraday low of Rs. 197.40 apiece.
The stock touched a 52-week high of Rs. 259.95 on June 28, 2023 and a 52-week low of Rs. 172.30 on July 12, 2022, indicating that at the current levels, the stock is trading 14.5 percent above its 52-week low and 24 percent below its 52-week high.
The stock has declined over 5 percent in the last six months. However, in the last one years, it has yielded a positive return of nearly 10 percent. In the past five years, it has been down by almost 12 percent.
Nazara Technologies, another online gaming platform, is also currently witnessing the repercussions of this decision, with its share price hitting a six-week low.
Delta Corp recorded a 6% increase in net profit to ₹51 crore for the quarter ending March 2023 compared to ₹48 crore in the same period last year. However, on a sequential basis, net profit declined by 40% from ₹85 crore achieved in the preceding quarter of December 2023.
Delta Corp Limited is an India-based holding company that is engaged in the casino (live, electronic and online) gaming industry in India. It owns and operates casinos in India, in the states of Goa and Sikkim and an international casino in Nepal, offering approximately 2,000 gaming positions.
It is also engaged in the online gaming space through Gauss Networks Private Limited, which operates the online poker site, Adda52.com.