Delta Corp rises 12% after gaming arm files DRHP, stock underperfoming

DGL's IPO will comprise a fresh issue of equity shares of face value of Rs 1 each, for an amount aggregating up to Rs 300 crore and an offer for sale for up to Rs 250 cr

Shares of Delta Corp soared 12.4 per cent to Rs 184.20 apiece on the BSE on Friday in an otherwise weak market after Deltatech Gaming (DGL) filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for an initial public offering. DGL is a wholly-owned subsidiary of Delta Corp.

DGL’s IPO will comprise a fresh issue of equity shares of face value of Rs 1 each, for an amount aggregating up to Rs 300 crore and an offer for sale (OFS) of the equity shares held by the company for an amount aggregating up to Rs 250 crore.

The company said the IPO will be subject to market conditions, receipt of applicable approvals, and other considerations. Upon completion of the offer, Deltatech Gaming will continue to be a subsidiary of Delta Corp, it said.

Delta Corp is the only listed company engaged in the casino (live, electronic, and online) gaming industry in India. It also has interests in hospitality and real estate.

However, despite the gain, the stock of Delta Corp has underperformed the market in the past month by falling 27 per cent, against the 6 per cent decline in the S&P BSE Sensex. It hit a 52-week low of Rs 162.10 on Thursday.

Jhunjhunwala

Thus far in June, ace investor Rakesh Jhunjhunwala and his wife Rekha have sold 7.5 million equity shares of Delta Corp through open market sale, according to a disclosure by him to the stock exchanges. After the transactions, Jhunjhunwala’s family’s stake in Delta Corp has decreased to 3.36 per cent from 6.17 per cent on May 31.

Jhunjhunwala and his wife together held 7.48 per cent stake in Delta Corp at the end of the March quarter.

Meanwhile, HDFC Mutual Fund said its schemes have increased shareholding in Delta Corp by 2.15 per cent as of June 10, taking the aggregate holding of the schemes to 9.21 per cent of the paid-up equity share capital of the company.