Deltatech Gaming Ltd, the company which runs poker platform Adda52, has filed share sale documents with markets regulator Securities and Exchange Board of India (Sebi) to raise ₹550 crore through an initial public offering.
The company will sell new shares worth ₹300 crore while parent Delta Corp. Ltd will sell existing shares worth ₹250 crore.
The proceeds from its new issuance, worth ₹150 crore, will be used for marketing and business promotion to achieve organic growth, and ₹50 crore will be deployed to strengthen technology infrastructure.
The company said it is in consultation with the bankers on the issue and may consider a preferential issue of shares or any other method aggregating up to ₹50 crore. If the placement is completed, the company will reduce the sale of new shares.
The offer is being made through the book-building process, with not less than 75% of the shares on sale to be allocated to qualified institutional buyers, 15% of the shares will be offered to non-institutional bidders and 10% to individual retail bidders.
Gurugram-based Deltatech is one of the early movers in India’s real money gaming segment. Citing a RedSeer report, the company said Adda52 has a market share of more than 34.5% for the past seven years until the fiscal year 2021.
The company said it earns revenue from a 3-15% commission fee that it charges for facilitating gameplay which is derived from the gamers’ contribution to the prize pool.
In 2016, Delta Corp bought Gaussian Networks Pvt. Ltd, which then operated poker site adda52.com, in a cash and stock deal for ₹182 crore ($27 million).
The IPO will be contingent on market circumstances, obtaining necessary approvals, and other factors. Deltatech Gaming will remain 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 ₹48 crore as compared to ₹58 crore in the corresponding period of last year. The company’s sales rose marginally to ₹218 crore from ₹211 crore a year ago.
Axis Capital Ltd and JM Financial Ltd are managing the share sale. The shares are proposed to be listed on BSE and NSE.
