Delta Corp hits over 3-year low; stock tanks 55% from 52-week high

FIIs reduced their stake in Delta Corp to 1.6% at the end of December quarter, from 6.7% in the preceding June 2023 quarter. Meanwhile, retail holding rose to 45% from 32.8%.

Shares of Delta Corp hit an over three-year low at Rs 116.50, down 1 per cent on the BSE in Wednesday's intra-day trade in an otherwise firm market on earnings worries. In comparison, the S&P BSE Sensex was up 0.8 per cent at 73,027 at 11:04 am.

In the past one month, the stock of the online gaming company was down 21 per cent. It fell 55 per cent from its 52-week high of Rs 259.95 touched on June 28, 2023, as the foreign institutional investors (FIIs) reduced their majority stake in the company. The stock had hit a record high of Rs 401.60 on January 23, 2018. Currently, Delta Corp is trading at its lowest level since November 2020.

FIIs had reduced their stake in Delta Corp by more than 5 percentage points to 1.56 per cent on December 31, 2023. They held 6.68 per cent in the company at the end of June 30, 2023, the shareholding pattern data shows.

In October 2023, two FIIs -- Bofa Securities Europe and Societe Generale – had offloaded shares of Delta Corp for Rs 56 crore through open market transactions.

Meanwhile, retail individuals holding in Delta Corp increased to 44.96 per cent from 32.81 per cent, data shows.

The company had reported a 59 per cent year-on-year decline in its consolidated net profit for the quarter ended December 2023 at Rs 34.48 crore. The income from operations stood at Rs 181.54 crore, 18 per cent lower than the year-ago period.

In a footnote alongside its December quarter (Q3FY24) numbers, Delta Corp said that on September 27, 2023, the holding company and its two subsidiary companies received show cause notices from the Directorate General of GST Intelligence (DGGI), Hyderabad, for alleged short payment of Goods and Services Tax (GST) aggregating to Rs 16,822.9 crore for the period July 1, 2017, to March 31, 2022.

On October 28, 2023, another subsidiary of the company received a GST show cause notice aggregating to Rs 6,384.32 crore for the period July 1, 2017, to November 30, 2022, from DGGI, Kolkata.

Without prejudice, the holding company and its three subsidiaries, based on legal assessment, are of the view that all the above notices and the tax demands are arbitrary in nature and contrary to the provisions of law," Delta Corp said in a regulatory filing.

Further, the Company said it has made investments in equity shares aggregating to Rs 677.52 crore in aforesaid three subsidiaries who have received notices for alleged short payment of GST aggregating to Rs 11,439.49 crore. In addition to investments in equity shares, the Company has also provided short term loans aggregating Rs 95.35 crore to these subsidiaries.

Considering the fact that these subsidiaries have a good ground to defend against the said show cause notices, the management of the Company believes that until the GST matter gets effectively concluded, no provision for impairment is currently required towards investments made in equity shares and loans given to these subsidiaries, Delta Corp had said.