BENGALURU (Reuters) -Shares of Indian casino operator Delta Corp plunged as much as 20% on Monday to their lowest since January 2021, after the company said that it received a notice to pay 111.40 billion rupees ($1.34 billion) in tax arrears.
Delta Corp, valued at about $466.4 million, added that the company and two of its units received intimations of an additional tax shortfall aggregating to 56.83 billion rupees for the period between July 2017 and March 2022.
Delta’s shares are down about 32% this year and about 50.8 million shares changed hands by 1:12 p.m. IST, more than 16 times their 30-day average.
The shares pared some of the losses in early trading and were last down nearly 18% at 144.7 rupees apiece.
The notice, issued under goods and services tax (GST) acts from 2017, deals another blow to the gaming company which is already contending with the federal government’s elevated levies.
The demand for GST on gross bet value spells trouble for Delta Corp, Amit Kumar Gupta, founder of Fintrekk Capital said, adding that the dues are more than the market capitalisation of the company.
Delta Corp, which owns casinos as well as poker and rummy websites, has said that it would pursue legal remedies to challenge the tax demand and related proceedings.
The stock logged its steepest intraday percentage decline since July 12, when the country’s GST Council decided to impose a 28% indirect tax on money collected by gaming companies. The stock had lost a fifth of its value then.
While global investors have urged Indian Prime Minister Narendra Modi to review the 28% gaming tax, citing a setback to prospective investments of about $4 billion, the country’s revenue secretary had said there was no need to rethink the tax.
($1 = 82.9700 Indian rupees)
(Reporting by Varun Vyas in Bengaluru; Editing by Dhanya Ann Thoppil)
