Delta Corp Announces INR 491 Crore Merger of Deltatech Gaming with Head Digital

In a significant development in India’s gaming industry, Delta Corp Limited (DCL), the country’s leading listed casino and gaming company, has unveiled plans to merge its subsidiary, Deltatech Gaming Limited (DGL), with Head Digital Works Private Limited (HDW). The transaction, valued at approximately INR 491 Crore, marks a strategic move to consolidate strengths in the online gaming space. Here’s a detailed look at the deal and its implications:

Transaction Overview

The merger involves a two-part process, combining an initial acquisition followed by a full merger. Here are the key details:

1. Parties Involved:

   • Delta Corp Limited (DCL): The parent company and a major player in India’s casino and gaming sector.

   • Deltatech Gaming Limited (DGL): A wholly-owned subsidiary of DCL, operating the popular online poker platform ‘Adda52’.

   • Head Digital Works Private Limited (HDW): A prominent entity running online rummy and poker platforms under the brand ‘A23’.

2. Two-Part Transaction:

   • Initial Acquisition: HDW will acquire a 51% stake in DGL by April 6, 2025. This will be achieved through a combination of primary subscription and secondary acquisition from Delta Corp, involving a cash consideration of INR 34.80 crores and a swap of equity shares issued by HDW. Post this acquisition, DGL will no longer be a subsidiary of Delta Corp.

   • Subsequent Merger: DGL will then be merged with HDW, with the process expected to be completed by June 30, 2026.

3. Equity Stake: Upon completion of the merger, Delta Corp will hold approximately 5.7% of the shareholding in Head Digital.

4. Enterprise Value: The transaction values DGL at an enterprise value of approximately INR 491.26 crores.

5. Approvals Required: The deal is subject to shareholder approval and regulatory clearances, including approval from the National Company Law Tribunal (NCLT) for the merger.

Strategic Benefits

• For Delta Corp: The merger allows Delta Corp to leverage HDW’s leadership in the online rummy market, expanding its footprint in the digital gaming space.

• For Head Digital: HDW aims to strengthen its poker business by integrating DGL’s Adda52 platform and its extensive user base.

Financial Highlights

Deltatech Gaming Limited (DGL):

• Turnover: INR 89.93 crores (14.15% of Delta Corp’s standalone turnover).

• Revenue (Total Income): INR 92.93 crores (13.77% of Delta Corp’s standalone revenue).

• Net Worth: -INR 3.48 crores (-0.14% of Delta Corp’s net worth).

Head Digital Works Private Limited (HDW):

• Annual Turnover (Consolidated): INR 841.39 crores.

• Annual Turnover (Standalone): INR 841.38 crores.

• Net Worth (Consolidated): INR 880.99 crores.

• Net Worth (Standalone): INR 875.60 crores.

Additional Terms

• Non-Compete Clause: Delta Corp has agreed to a five-year non-compete and non-solicitation arrangement following HDW’s acquisition of the 51% stake in DGL.

• Representations and Warranties: Both parties have provided customary representations, warranties, and indemnities, capped at DGL’s enterprise value.

The merger of Deltatech Gaming with Head Digital represents a strategic alignment of two key players in India’s online gaming industry. By combining their strengths, Delta Corp and Head Digital aim to create a formidable presence in the rapidly growing digital gaming market. This deal not only enhances Delta Corp’s portfolio but also positions Head Digital as a stronger contender in the online poker and rummy segments.