Deltatech Gaming Limited, a digitally native, technology led gaming platform, delivering a gamer-centric gaming experience across its various offerings files its Draft Red Herring Prospectus (DRHP) with the markets regulator, Securities and Exchange Board of India (SEBI), to raise Rs. 550 crore through an initial public offering (IPO).
The issue with a face value of Re 1 per equity share consists of a fresh issue of equity shares worth up to Rs. 300 crore and an offer-for-sale (OFS) of Rs. 250 crore by Delta Corp Limited. The offer also includes a reservation for subscription by eligible employees and Delta shareholders. The Offer is being made through the Book Building Process, wherein not less than 75% of the Offer shall be available for allocation to Qualified Institutional Buyers, not more than 15% of the Offer shall be available for allocation to Non-Institutional Bidders and not more than 10% of the Offer shall be available for allocation to Retail Individual Bidders.
Additionally, the company, in consultation with the lead bankers to the issue may consider a preferential issue of equity shares or any other method aggregating up to Rs. 50 crore. If such placement is completed, the fresh issue size will be reduced.
The proceeds from its fresh issuance worth Rs. 150 crore will be utilised for Organic growth, through marketing and business promotion activities, to attract new gamers and retain existing gamers, Rs. 50 crore for strengthen the technology infrastructure to develop new capabilities, maintain and manage its existing platform and general corporate purposes.
The Gurugram-based company is one of the earliest companies in the real money gaming segment in India. According to the RedSeer report quoted in its DRHP, Adda52 is India's first online poker platform, with a variety of poker games to choose from. It has been dubbed a "category pioneer" in India, with a significant gamer base and a market share of more than 34.5 percent for the past seven years, up until Fiscal 2021.
Its platforms include Adda52.com, which offers poker, and Adda.games, which offers multi-games, including Adda52Rummy, which is its rummy product and had over 5.55 million registered gamers as on March 31, 2022.
Over the years, the digital gaming company has spent in developing its own platforms, which it continues to evolve. It also believes that investing in its gaming platform and offers is critical for business growth, new player on-boarding, and existing player retention, by using adjacencies such as game types, promotions, and so on.
Explaining its core monetization model - Deposits are received through authorized payment gateways and kept in a bank account that the platform doesn't have any right over and the amount is refundable to the gamers. Revenues earned by the company is a 3-15 % commission fee considered for facilitating the gameplay and this comes from gamers contribution to the prize pool and the balance is considered as a winning prize pool or 'pot'. There is no participation of its own in any game.
In April 2021, it acquired multi-gaming technology under the trademark Faboom and rebranded it as the Adda.games platform, thereby expanding its footprint in the gaming business, in line with its expansion goal.
Adda.games is a complete gaming platform that offers players a diverse and distinctive portfolio of real money games in one location. Its in-house technology team collaborates with third-party developers to produce games that are relevant, interactive, and fun. It hosts a variety of games on Adda.games, including rummy, poker, fantasy cricket, and casual real money games like call break.
Deltatech Gaming's revenue from operations stood at Rs. 137.23 crore for Fiscal 2022, against Rs. 155.37 crore for Fiscal 2021, the decline was a result of post-COVID-19 normalization.
The Gaming Market in India was valued around Rs. 20,200 crore in Fiscal 2022 and is expected to grow at a CAGR of 32% to reach Rs. 60,000-63,000 crore by FY 2026, as real money gaming (RMG) attracts the highest-paying players and as a result, it has become India's primary source of revenue. With the increased expectation of regulatory certainty, it is predicted to grow at a 30 percent CAGR. The future growth of RMG games will be driven by a rise in gamers' willingness to pay and an increase in ARPU.
Axis Capital Limited and JM Financial Limited are the book running lead managers and KFin Technologies Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.