Deltatech Gaming Limited, the parent company of poker platform Adda52, has filed its draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (SEBI) to raise Rs 550 crore through an initial public offering (IPO).
The issue will comprise primary share issuance of fresh equity worth Rs 300 crore and an offer-for-sale (OFS) of Rs 250 crore by Delta Corp Limited.
The proceeds from its new issuance, worth Rs 150 crore, will be used for marketing and business promotion to achieve organic growth, and Rs 50 crore will be deployed to strengthen technology infrastructure.
The company said it is in consultation with the lead bankers on the issue and may consider a preferential issue of equity shares or any other method aggregating up to Rs 50 crore. If such placement is completed, the company will reduce the fresh issue size.
The offer is being made through the book-building process, wherein not less than 75% of the offer will be available for allocation to qualified institutional buyers (QIP), 15% of the offer shall be available for allocation to non-institutional bidders and 10% of the offer allocated to retail individual bidders.
Delta Corp is an Indian gaming and hospitality company in India that owns and operates casinos. The platforms include Adda52.com, which offers poker, and Adda.games, which is focused on multi-games, including Adda52Rummy, its rummy offering which has over 5.55 million gamers as of March 31, 2022, the company said.
In 2016, Delta Corp bought Gaussian Networks Pvt Ltd, which then operated poker site adda52.com, in a cash and stock deal for Rs 182 crore ($27 million).
The IPO will be contingent on market circumstances, the obtaining of necessary approvals, and other factors. Deltatech Gaming will remain a part of Delta Corp after the offer is completed, the company noted.
Delta Corp's consolidated net profit for the fourth quarter fell 17% to Rs 48 crore as compared to Rs 58 crore in the corresponding period of last year. The company's sales rose marginally to Rs 218 crore from Rs 211 crore a year ago.
Deltatech Gaming’s revenue from operations stood at Rs. 137.23 crore for fiscal 2022, against Rs. 155.37 crore for Fiscal 2021, the decline was a result of post-Covid normalization, the company said in a statement.
Axis Capital Ltd and JM Financial Ltd are the book running lead managers and KFin Technologies Ltd is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.