Delta Corp aiming to raise $30-40 million for online gaming business

Gaming and entertainment major Delta Corp is looking to raise around USD 30-40 million for its online gaming business, Hardik Dhebar, group chief financial officer (CFO), told CNBC-TV18 on Tuesday.

The Goa government recently permitted casinos to reopen at 50 percent capacity in the state earlier this month which gave a much-needed fillip to Delta Corp’s finances. Dhebar informed the channel that the company is at the final stages of appointing a banker.

“We are looking at doing a USD 30-40-50 million capital raise, which we will utilize to grow the business,” he added.

Covid-induced restrictions had not only harmed the casino industry but also brought the tourism industry to a standstill. The company recorded a net loss of Rs 29.18 crore in Q1 FY22 as against a net loss of Rs 28.67 crore in Q1 FY21. Net sales during the quarter rose 57% Y-o-Y to Rs 75.87 crore during the quarter.

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And this USD 30-40-50 million should help us for the next 3-6 months to pump up our revenue, pump-up the numbers,” Dhebar said, highlighting that the online business has remained a steady contributor to the company’s topline.

With the Goa government’s nod to casinos, companies are resuming business activity to recuperate from economic damage suffered over the past six months.

Speaking about how the casino business has been faring since the reopening, he said, “It’s about 8-10 days that we are in operation (in Goa) and the last 10 days of traction shows that we should be back to pre-COVID levels. Hopefully, in the next quarter, when we report a full quarter, you will be able to see that the numbers are way better than what we all expect. So, it’s encouraging and very good.”

Earlier in the month, Goa’s Investment Promotion Board (IPB) had given its nod to Delta Corp’s most ambitious project in the coastal state – the Entertainment City at Dhargal.

The project is bound to not just improve infrastructure in Pernem, but also create jobs and give a much-needed shot in the arm to the Covid-impacted entertainment-led tourism and hospitality industry in the state.

The Board, under the chairmanship of chief minister Pramod Sawant, granted approval for the 100-acre project that comprises a casino, waterpark, resort, and multiplex. The mega project will be located just 5 km from the new Mopa airport.

On 12 December 2020, the company had made public the news of the in-principle approval from IPB for setting up an integrated resort in Pernem.

In 2018, Dhebar had outlined the company’s plans of building an entertainment city. However, the Covid-19 pandemic impacted the business with casinos remaining shut for large parts, thus leading to cash flows taking a hit.

The initial estimate pegged the project at an investment of Rs 1200 to Rs 1500 crore, with a timeline of 36-48 months for completion. The project is likely to be funded by a consortium of investors and not solely by the Jaydev Mody-owned company.