News

Published: September 27, 2023
Updated: September 27, 2023

Delta Corp Faces Steep Decline After Tax Notice; Prominent Investor Sells Stake

Unforeseen Challenges Send Delta Corp Stock Plummeting

The once-thriving shares of Delta Corp have plummeted by an alarming 23% in just two days. This dramatic decline was triggered by a substantial tax notice totaling Rs 16,822 crore, served to the company on Friday, September 22, 2023. As a result, the stock is now trading at its lowest level since December 2020.

Investor's Actions Add to the Turmoil

Adding to the turmoil, prominent investor Ashish Rameshchandra Kacholia opted to sell a significant portion of his stake in Delta Corp. On Monday, he executed an open-market transaction, offloading 1.5 million shares, amounting to 0.56% equity of the company. This move sent shockwaves through the market and further eroded investor confidence in Delta Corp.

Rapid Stock Decline

In just two trading days following the tax notice, Delta Corp's stock value plummeted by 23%, demonstrating the profound impact of the tax issue on the company's financial outlook. The market reacted swiftly to the news, causing the stock to hit a 33-month low, trading at Rs 134.70 on the National Stock Exchange (NSE).

Tax Woes and Penalties

Delta Corp's troubles began when it received a tax notice of a staggering Rs 16,822 crore from the authorities. Additionally, it faced interest and penalty charges from the Directorate General of GST for the period spanning from July 2017 to March 2022. These unexpected financial burdens have raised concerns about the company's ability to weather this storm.

Government Taxation Approach

One of the central issues at play here is the government's approach to taxation on the gross bet value of all games played at casinos during the specified period, rather than gross gaming revenue. This taxation method has been a longstanding concern within the industry, prompting numerous representations to the government to address the issue collectively.

Kacholia's Exit

Ashish Rameshchandra Kacholia's decision to sell a substantial portion of his Delta Corp shares at a price of Rs 144.65 per share underscores the gravity of the situation. His move has not only weakened the company's ownership structure but also rattled investor sentiment even further.

Notice brings this gaming giant to shivers

Delta Corp's recent woes, characterized by a staggering tax notice and a prominent investor's exit, have cast a dark shadow over the company's prospects. As the stock hits a 33-month low, it faces significant challenges in regaining investor trust and addressing the taxation concerns that have plagued the industry. The road ahead for Delta Corp remains uncertain, and stakeholders will be closely watching for any developments that may help stabilize the company's position in the market.