Deltatech Gaming Limited, the organization which runs the poker platform Adda52, has filed a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise INR 550 Cr through an initial public offering (IPO).

Once listed, Deltatech Gaming will join the online gaming platform Nazara Technologies and will become the second organization of its kind to go public in India.

As indicated by the draft prospectus, the IPO will comprise a new issue worth INR 300 Cr and a proposal available for sale of INR 250 Cr. Axis Capital and JM Financial have been selected as book-runners for the IPO. The shares will be listed on the BSE and the NSE.

Deltatech Gaming is a wholly-owned subsidiary of Delta Corp. None of the directors of Delta Corp had significant equity in Deltatech Gaming.

The organization intends to use around INR 150 Cr for marketing and business promotion to accomplish organic growth, and approximately INR 50 Cr will be used to further develop the innovation infrastructure.
The gaming platform added that it will likewise contribute an undisclosed sum from the net proceeds of the IPO to fund inorganic growth drives and general corporate purposes.

Deltatech Gaming offers several real-money games (RMGs), with Adda52 being the best. It said that Adda52 was one of the earliest organizations in the RMG sector in India, and it professed to have a 34.5% market share in that section.

In 2016, Deltatech Gaming’s parent organization, Delta Corp, obtained Gaussian Networks Pvt. Ltd., which operated the poker site adda52.com, in a deal worth INR 182 Cr. Delta Corp then, at that point, made Deltatech Gaming, an amalgamation of its own RMG business and Adda52.

Deltatech Gaming revealed a loss of INR 4.3 Cr in FY22 as against a profit of INR 15.95 Cr in FY21 because of a decrease in its revenue and an ascent in expenses. In FY22, its total income fell 12% year on year (YoY) to INR 137.63 Cr, while costs rose 6% to INR 134.53 Cr.

A RedSeer report commissioned by Deltatech for the draft prospectus stated that with around 400 million online gamers in 2020, India was the world’s second-biggest gaming market by user base and is supposed to have upwards of 710 million gamers in the next four to five years.

The overall gaming market in India was estimated at between INR 149-150 Bn in FY21 and between INR 201-202 Bn in FY22, as per RedSeer. The gaming industry is set to develop at a CAGR of 32% to arrive at a size of INR 600-630 Bn toward FY26’s end.

The Deltatech Gaming IPO comes at a time when there is developing uncertainty around online gaming, specifically the sort of games being offered.

As of late, the Ministry of Information and Broadcasting (I & B) issued an advisory for TV channels, newspapers, and digital media outlets, requesting them to “refrain from publishing advertisements” on online platforms that stake on chance.

In April, the Union Ministry of Finance set up a Group of Ministers (GoM) to attempt to bring online gaming, online game of chance, casinos, and race courses under the ambit of GST. The panel reportedly settled on a 28% GST rate and the matter will be taken up for discussion at the next GST Council meeting.

The public authorities are supposedly working on a national framework for online gaming.

In June, the Ministry of Electronics and Information Technology (MeitY) held a gathering with 40 online gaming platforms, including unicorns like MPL and listed startup Nazara Technologies, among others, to examine the said structure.

Credit: Inc 42