Shares of the gaming company Delta Corp rallied over 7% in an intraday trade on Friday after its online gaming arm filed a draft paper to launch an initial public offering (IPO). Ace investor Rakesh Jhunjhunwala-backed company in an exchange filing says its wholly-owned subsidiary Deltatech Gaming Limited (DGL) has filed a draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (SEBI) to raise funds via a public listing of shares.
Following the announcement, Delta Corp shares opened a tad higher at ₹164.70, against the previous closing levels of ₹163.85 on the BSE. During the session so far, the stock gained as much as 7.2% to hit an intraday high of ₹175.65 on the back of huge volume. As many as 94.6 lakh shares worth ₹158.5 crore changed hands over the counter in the first two hours of trade compared with a two-week average volume of 2.58 lakh stocks. The market capitalisation of the smallcap stock surged to ₹4,662.9 crore.
The stock had been under stress for the last two sessions after exchange data showed that Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala trimmed their shareholdings in the company by 2.80% in June 2022. The ace investor sold 60 lakh equity shares (or 2.2435% stake) of Delta Corp between June 1 to June 10, while another 15 lakh shares (or 0.5609% stake) in the company on June 13 and June 14. Jhunjhunwala and his wife held a 6.1695% stake in the gaming company on May 31, 2022.
The stock has fallen 31% in the calendar year 2022, while it dropped 27% alone in the last one month. It has given flat returns to shareholders in the last one year. Delta Corp shares traded lower than 5-day, 20-day, 50-day, 100 day, and 200-day moving averages.
Deltatech Gaming plans to raise ₹550 cr via IPO
Deltatech Gaming (formerly known as Gaussian Networks), a wholly-owned subsidiary of Delta Corp, has filed a draft red herring prospectus on June 16, 2022 with the SEBI, to raise ₹550 crore through IPO. The offer comprises a fresh issue of its equity shares of the face value of ₹1 each, for an amount aggregating up to around ₹300 crore, and an offer for sale (OFS) of up to ₹250 crore.
The IPO is subject to market conditions and requisite approvals. Post completion of the offer, Delta Corp (DGL) will continue to be a subsidiary of Delta Corp Limited.
The offer includes the proposed reservations for the eligible employees of DGL and the parent company; and the eligible public equity shareholders of the company.