Delta Corp shares hit a lower circuit on September 25 as investors dumped the stock after the casino operator received a massive tax notice of Rs 16,822 crore. The claim by the tax department is 3.5x Delta Corp’s last closing market cap and more than double the company’s last decade’s revenue.
The development battered the company stock which ended 18.40 percent lower at Rs 143 apiece on BSE on September 25. The tax notice also wiped off Rs 700 crore from Delta Corp's market cap within 30 minutes of trade.
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Meanwhile, the company is gearing up to fight the tax notice. The company said in its exchange filing, "The amount claimed in the DG Notice is inter alia based on the gross bet value of all games played at the casinos during 2017-2022. Demand for GST on gross bet value, rather than gross gaming revenue, has been an industry issue and various representations have already been made to the Government at an industry level in relation to this issue."
“The company has been legally advised that the tax demand is arbitrary and contrary to law, and the company will pursue all legal remedies available to it to challenge such tax demand and related proceedings,” it added.
Also Read: Delta Corp: Game over or will the house win as always?
A month ago its chief financial officer Hardik Dhebar resigned. Two months ago the company informed that the initial public offering of its online gaming business had been put on hold. This tax notice is the third blow in a matter of months.
For the quarter ended June, the company posted an 18.86 percent year-on-year jump in net profit at Rs 67.91 crore. Revenue from operations came in at Rs 277.65 crore, up 10.74 percent from Rs 250.72 crore in the same period previous fiscal. Its total expenses rose to Rs 195.01 crore from Rs 179 crore in the year-ago quarter.
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