Popular online poker game developer, Deltatech Gaming Ltd has submitted a draft red herring prospectus to SEBI, India’s market regulator. The company has received SEBI’s clearance to raise Rs. 550 crore from the public via a fresh issue of shares and an OFS (offer-for-sale) by Delta Corp Ltd.
The Gurugram-based company is best known for its Adda52 and Addagame platforms, which support real money games like poker and rummy. Being an early mover in this sector, the company managed to become the dominant market player in this sector.
Read along to learn more about the proposed Deltatech Gaming IPO.
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About Deltatech Gaming Ltd
Deltatech Gaming Ltd (formerly Gaussian Networks) was established in 2011, as a Kolkata-based online multiplayer game and platform developing company. It is one of the early innovators in the real money gaming segment. It was established with the vision to provide users with the best possible gaming experience. It allows gamers to compete nationally with their teams and achieve excellence.
Deltatech Gaming is considered as a pioneer in its category with a massive gamer base and had a market share of 34.5% until FY21. It operates a popular poker platform “Adda52”, which is the first-ever online poker platform in the country offering multiple poker variants. Its core competence lies in building its own in-house platforms along with developing or moderating data intelligence capabilities
Moreover, the company has several real money gaming platforms in its stack of offerings such as Adda52 and Adda.games. Adda52 is its poker platform while Addagames has multiple offers besides rummy, including fantasy cricket, fantasy football, call break, etc.
Details and Objectives of Deltatech Gaming Ltd.
Deltatech Gaming Ltd is all set to launch its IPO and it has received clearance for its draft papers from SEBI. The company has proposed an IPO of Rs. 550 crore comprising a fresh issue of Rs. 300 crore and a Rs. 250 crore OFS. JM Financial and Axis Capital are the book-running lead managers appointed for this IPO.
Deltatech Gaming will not get any funds from its upcoming OFS. Instead, the entire proceeds will be given to the selling promoter after paying applicable taxes and IPO-related expenses.
Deltatech Gaming Ltd has proposed several objectives for its fresh issue, which are as follows:
- To invest more in developing its in-house platforms and develop its data intelligence capabilities
- To invest in various types of marketing strategies such as celebrity-led campaigns, online and offline marketing campaigns, influencer marketing, etc.
- For inorganic growth initiatives
- For general corporate usage
The GST council’s announcement of levying a goods and service tax of 28% has led to the company pausing its IPO plans. It may choose to launch the public issue once the markets are more stable and there’s more clarity on the GST update.
Also Read: IPO investment strategy
Company Financials
Here is a summary of the financial details of Deltatech Gaming Ltd for FY 22, FY 21 and FY 20.
| Particulars | For the Financial Year Ending on (Rs. Millions Except EPS) | ||
| March 31, 2022 | March 31, 2021 | March 31, 2020 | |
| Total Assets | 520.96 | 725.47 | 768.86 |
| Total Liabilities | 423.44 | 719.48 | 992.27 |
| Total Expenses | 1,423.01 | 1,345.25 | 929.59 |
| Total Revenue | 1,376.32 | 1,560.51 | 1,321.64 |
| Profit/Loss After Tax | (43.99) | 159.50 | 298.49 |
| EBITDA | 34.89 | 282.50 | 427.22 |
| EPS (Basic and Diluted) | (0.53) | 3.14 (Basic) 3.13 (Diluted) | 5.92 |
Strengths of Deltatech Gaming Ltd.
The following is a list of notable strengths of Deltatech Gaming Ltd.
- Deltatech Gaming Ltd has a capable in-house technology team powered by data engineering and data analytics enabling it to capture multiple statistics and leverage those to modify platforms and other product offerings.
- It has a positional advantage as it was a segment leader for seven consecutive years and is supported by decades of industry experience and a strong business model acting as an added advantage.
- Deltatech Gaming Ltd aims to provide robust and seamless omnichannel offerings along with integrated systems for online playing. Gamers can connect via smartphones, tablets, and desktop along with integrated offline modes.
- The directors and the Chief Finance Officer of this company are industry veterans with experience in leading major technology companies. They have built e-commerce and consumer brands before.
Also Read: How does an IPO work?
Risks Involved
Here are some of the risks associated with Deltatech Gaming Ltd that you should be aware of before investing:
- The business model of Deltatech Gaming Ltd is entirely based on real money multiplayer games which are subjected to regulatory uncertainties in India. Therefore any stringent regulation from the government can adversely affect this company’s operations, revenues and profitability.
- A major portion of its revenue comes from “Adda52”. Reduction in the entry of new players in the real money gaming segment can impact its revenue and financial performance.
- In FY22 it incurred a net loss of Rs. 4.399 crore. If the company is unable to generate sufficient profit in the future, it can directly affect its business operations and the value of equity shares.
Summary
To summarise, Deltatech Gaming Ltd is one of the leading players in its segment. It is preparing to launch its IPO and has filed its DRHP with SEBI. By considering its strengths, risks, objectives and financials, you can make a better decision.
There is much information that the company has not announced yet; therefore keep an eye out on this website for more updates on the Deltatech gaming IPO dates and more.
Also Read: Risk of investing in IPO
Frequently Asked Questions
The total size of the IPO is Rs. 550 crore, out of which Rs. 300 crore is a fresh issue and Rs. 250 crore is the OFS component.
Delta Corp Ltd is the promoter of the company.
KFin Technologies Ltd is the registrar appointed for this public issue.
The opening and closing dates of this IPO are not yet announced by the company.
