Delta Corp defers IPO plans of its online gaming division amidst GST uncertainty

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Gaming and hospitality company Delta Corp Ltd has halted its plan to take its online gaming division public due to the uncertainties concerning the GST levy method.

Delta Corp offers real money and wagering games which were recently announced by the GST Council to be taxed at 28% on full face value going forward. The company is waiting for further clarity on the situation before giving the IPO plans a green light.

“The investing community obviously would want absolute crystal clarity when it comes to online gaming, and they would want a clear picture as to what the way forward is and without which, nobody is going to put $1 into any new investment, especially in a sector which has this kind of overhang,” said Hardik Dhebar, CFO of Delta Corp, as quoted by Moneycontrol.

The Q1 results for FY24, meanwhile, saw a rise of 9% in consolidated revenue. The consolidated EBITDA also went up by 9.5% along with net profit which rose by 18.9 percent. When it comes to the online gaming division it contributed 15% to the net revenue, excluding GST.

While the GST Council clarified that the tax will be levied on full face value. However, the decision on how it will be taxed (initial deposit or every contest entry amount) is expected to be finalized in the upcoming meeting on August 2.

Several online gaming firms and industry bodies have claimed that 28% GST on full face value will lead to heavy loss of revenue for the exchequer as well and many startups will have to shut down due to the increased tax burden.

During an interview recently, Dhebar also mentioned that the decision to charge GST on full face value is illogical. Talking about revenues, he revealed that there will be no changes till the new GST rate comes into effect.