Delta Corp gaming arm files DRHP for ₹550-cr IPO

Deltatech Gaming, the gaming subsidiary of Delta Corp, has filed the draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise ₹550 crore via the initial public offering (IPO) route.

The issue will see fresh issue of shares as well as promoter Delta Corp offloading stake in an offer for sale (OFS). The gaming platform will issue fresh shares worth ₹300 crore in the IPO, whereas the OFS portion will see the promoter offer shares worth ₹250 crore. The face value of each equity share will be ₹1, the DRHP states.

The proceeds from the offer for sale will be received by the selling shareholder, Deltatech Gaming states in the DRHP. It further mentions that the company will not receive any proceeds from the offer for sale. “The selling shareholder will be entitled to the proceeds from the offer for sale, net of its portion of the offer related expenses.”

The net proceeds from the issue will be utilised to increase and retain the gamers on the platform, as well as to grow its offerings and capabilities. To this end, the company will invest ₹150 crore for organic growth, through marketing and business promotion activities, to attract new gamers and retain existing gamers. It will invest another ₹50 crore to strengthen its technology infrastructure to develop new capabilities, and maintain and manage its existing platforms.

“In addition to this, in order to capitalise on market opportunities and to pursue our growth strategies, we intend to, amongst other things, identify and acquire targets, in India or abroad, that would strategically fit and be synergistic to our business and would strengthen our technological infrastructure,” Deltatech says. “We have invested towards these avenues in the past, and we expect these to continue to be critical to our business in the future.”

A portion of the net proceeds will be utilised for funding inorganic growth initiatives and general corporate purposes.

For the year ended March 2022, Deltatech had reported a consolidated net loss of ₹4.39 crore, against a profit of ₹15.95 crore in the previous fiscal. Its total income for the fiscal 2022 stood at ₹137.63 crore, against ₹156.05 crore in the year-ago period. Revenue from operations also slipped to ₹137.22 crore in FY22 from ₹156.05 crore a year ago.

Deltatech Gaming has roped in Axis Capital Limited and JM Financial Limited as the book-running lead managers (BRLMs). KFin Technologies Limited is the registrar for the issue.