Delta Corp re-enters real estate sector as gaming business remains uncertain amidst retrospective GST risk

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Listed gaming and hospitality firm Delta Corp Ltd. has announced its entry into real estate development amid growth and expansion of the sector. The company has made a strategic investment of nearly Rs 100 crore in Peninsula Land Ltd., a Mumbai-based firm in the sector.

The investment comes as a part of a joint venture between the firms, wherein Delta will be the majority stakeholder. Furthermore, this venture will comprise with a total capital outlay of Rs 250 crores. The move comes amid Delta receiving multiple GST evasion notices from the DGGI for its core business vertical.

Peninsula boasts over 22 years of experience in the real estate sector and is expected to help Delta Corp to foray into the sector once again. The company has completed 19 projects successfully and is also working on a couple more.

It is worth mentioning that the Delta has previously profitably completed numerous real estate projects in the past. Moreover, its promoter also holds 35 years of experience in the new sector. The company’s chairman Jaydev Mody also came forward to express his opinions on Delta’s latest venture.

Real estate sector is poised for growth, says Delta chairman Mody

“Today, India’s real estate sector is poised for growth and presents attractive opportunities to businesses. The industry is consolidating as regulations increase, demand grows, and customers increasingly seek established and trusted brands. Via this strategic venture with PLL, Delta is perfectly positioned to take advantage of this new phase of growth in India’s realty space,” Mody said in a press release.

Managing Director of PLL, Rajeev Piramal said, “I am thrilled to announce a new phase of growth with Delta that will allow us to unlock the immense value that exists in the real estate sector today.”

The flagship project for Delta was also recently delayed, which gives the company free reserves and cash flows. Since Delta Corp is the majority stakeholder, it will execute projects mainly in Mumbai and Goa.

Speaking of the recent GST evasion notices, DGGI issued multiple notices to the firm amounting over Rs 16,000 crore. Additionally, its subsidiary Deltatech Gaming, which owns and operates Adda52, was handed a notice worth Rs 6,384 crore. The firm opposed tax-evasion claims and the matters are currently pending in the court.

The matter concerning Adda52 was heard in the Calcutta High Court on Thursday, November 30. The bench ordered the firm to file reply to the show cause notices it received from the tax authority. Final hearing on the matter is scheduled for March 2024.

Delta’s move can also be seen as a strategy to further expand its services after sudden changes to GST on online gaming and casino. Furthermore, Delta Corp along with other gaming firms have also received GST notices from DGGI.

The company has seemingly decided to take a stance against the GST notices, calling them arbitrary. Most recently, they received interim relief from Sikkim High Court regarding the same.