Delta Corp Ltd, a prominent Indian casino operator, has announced a significant shift in its strategic plans by deferring an integrated resort development in north Goa and redirecting its focus towards a substantial investment in the real estate sector. Facing challenges such as tax bills and the looming prospect of a 28% GST on gaming operators in India, Delta Corp is making a strategic move to capitalize on the growth potential in real estate.
Strategic Investment and Joint Venture:
In a recent filing, Delta Corp disclosed its decision to invest nearly 100 crore (US$12 million) in Peninsula Land Ltd (PLL), a leading real estate developer in India. This move includes the acquisition of 1.5 million shares in PLL. Additionally, Delta Corp and PLL will embark on a joint venture with a capital outlay of US$30 million, where Delta Corp will hold the majority stake. The joint venture aims to expand Delta Corp’s presence into the real estate sector, primarily focusing on projects in Mumbai and Goa.
Challenges in the Gaming Industry:
The strategic shift comes amid a challenging period for India’s gaming industry, with Delta Corp contending with substantial tax bills and broader discussions around the implementation of a 28% GST on all gaming operators. The move to diversify into real estate reflects a proactive response to the uncertain landscape of the gaming sector in India.
Rationale for Real Estate Expansion:
Delta Corp justified the foray into real estate, citing its successful execution of past projects and the promoter’s over 35 years of experience in the industry. With the flagship project in Dhargalim, Goa, deferred, Delta Corp sees an opportunity for long-term growth in the real estate sector. The company, committed to maintaining a debt-free status, plans to leverage its free reserves and cash flows to execute projects in Mumbai and Goa.
Vision for Growth:
Chairman of Delta Corp, Jaydev Mody, expressed optimism about the strategic venture with PLL, stating that India’s real estate sector is entering a phase of growth with consolidation and increased demand. Mody highlighted the importance of established and trusted brands in this evolving landscape, positioning Delta Corp to capitalize on the growth opportunities in India’s realty space.
Delta Corp’s strategic pivot from a planned integrated resort to a substantial investment in real estate reflects a dynamic response to challenges in the gaming industry. The move positions Delta Corp to tap into the promising growth trajectory of India’s real estate sector while navigating regulatory uncertainties in gaming. As the company embraces this new phase of expansion, its commitment to a debt-free approach and strategic partnerships underscores a vision for sustained, diversified success in the ever-evolving landscape of India’s business ecosystem.