Some very interesting development in Delta’s Daman casino operations. They have passed a resolution in this AGM to provide 550cr worth of corporate guarantee to their Daman subsidiary which obviously doesn’t need so much funds. It is roughly cash positive so cash requirement is certainly not so high in absence of any big obligation etc. One theory which is going around for sometime that Daman admin which is controlled by the centre was reluctant to approve 1st onshore casino. Delta had claimed that its 5star property is offshore like Goa as it is situated on creek or some kind of water body which was unacceptable.
Now Goa has moved to approve onshore casinos and going ahead with forming rules, it will help Daman admin to move forward on this matter. Hence, Delta is readying to make payment for onetime license fee etc. I can’t confirm but this AGM resolution will raise hopes and speculation. As usual, they say they are ready to launch casino ops within a week post approval. This one approval will create another Goa like revenue potential overnight by roughly doubling casino table capacity with fertile catchment areas of Mumbai/Pune and Gujarat.
Would be interesting to hear from anyone who attended the AGM and heard anything else on this matter.
Disc: covered my shorts and had added more around 230 post Q1 results
Surprised to see that Daman casino is not built as per offshore norms. This is the reason of delay. Can you tell the source of this fact ?
Discl - Invested with good stake.
I don’t have access to the docs so can’t confirm but this was the interpretation based on Daman Admin’s flip flops. They gave in principle approval for a 5 star hotel and casino but chickened out in approving onshore casino. Delta on its part tried to convince but whole 5 star property could not be offshore. Let’s hope this achieves a closure after Goa’s onshore casino policy.
OK I understand. Good observation. Daman admin has to change its policy to grant license to Delta. Goa policy change will change the sentiment towards land based casino.
Once Goa casinos are shifted to land, Delta can shift its offshore vessels to Daman too.
They will build onshore casinos in goa within a span of four years untill then the casinos will operate onshore only so they can move the vessels after four years only. They have to buy new vessel for daman no other option if they want to start within this year and all this is true
One more thing I want to highlight that that hav bought near about 100 acre land in goa. Out of this they will establish casinos on few acres in startegic manner. Rest of that and they will lease or build infra on partnership basis so Capex is not a big problem they hav resources to repay debt etc within short period of time.
Source:concall
there is no new capex planned for Sikkim or Daman except Goa where they would spend $250-300m over the next few years. Those vessels can’t be kept in rough sea so a new low tide/shallow sea zone are needs to be found. They have indicated that Puduchery and Andhra have shown interest but nothing final yet. Everyone is watching Goa’s transition to land to take a call.
Article on online gaming (card games) and no mention of adda52. Moonfrog and Alibaba mentioned. I realize adda52 is more poker than teen Patti but am still surprised they aren’t even mentioned.
I am just curious if company has Mutual Funds and cash of 470 odd cr then why did company diluted equity to raise capital of 550 crore and promoters also diluted their stake by 7% . If the growth prospects are so good then why reduce stake
Plus the debt on the books is negligible ? Isn’t cost of equity always higher than cost of debt then why not raise Debt if you need cash for expansion.
These are some of the questions troubling me . I do not doubt the growth of sector overall but some of the actions seem puzzling to me
Disc : I am having a tracking position on the company and wanted to add more in the recent turmoil.
Delta corp as usual has come up with great numbers for this quarter. However the impact of the new policy which hiked the casino licensing fees by 4 times is not seen in the current quarter. Can anyone throw light as to when will this be put into effect?
Emkay seems to think very well of the results given the fact that the Casino revenues were up indicating a gaining of market share from smaller rivals.
Please read the quarterly results notes after consolidated financial tables i.e. note no 6 for impact of license fee hike. Great set of numbers again from core Goa casino ops. Online is a big disappointment but remains a small part to dent overall results. On political front I think casino lobby is doing everything to make sure that Parikkar declares new onshore policy ASAP. Two Congress MLAs have joined BJP which is a bigger trigger IMO.
@ShrenikGandhi check the segment results. Online has disappointed due to competition while hospitality is a non-event. Casino gaming did 17cr of additional EBIT qoq on 25cr of additional sales. Not many biz have this kind of operating leverage and this is the biggest story here. I look at this biz from OCF point of view since ongoing biz has 8-10cr of maintenance capex. This company can generate 250-300cr of FCF this year onwards and this will grow obviously.
Capacity constraint remains an issue but they have started filtering out amateurs on high footfall days but overall utilization based on seating capacity basis remains at 55%. (as per concall)
