Delta Corp Sells Adda52 to A23 Parent for Rs 491 Crore in Major Gaming Industry Deal

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Delta Corp has announced the sale of its skill gaming subsidiary, Deltatech Gaming, to Head Digital Works, the owner of A23, for ₹491 crore. The transaction will take place through a cash-and-stock deal, strengthening Head Digital Works’ presence in the online poker industry.

According to Moneycontrol, the deal will be executed in two phases. In the first phase, Hyderabad-based Head Digital Works will acquire a 51% stake in Deltatech Gaming. This will involve a cash payment of ₹34.8 crore and an equity swap by April 6, 2025. This phase will grant Delta Corp a 2.8% stake in Head Digital Works.

In the second phase, Deltatech Gaming will merge with Head Digital Works, increasing Delta Corp’s stake to 5.7%. The merger is expected to be completed by June 2026. Delta Corp’s Managing Director Ashish Kapadia said, “We believe that this transaction will help Adda52’s leading position in the online poker market.”

Deltatech Gaming, formerly known as Gaussian Networks, acquired Adda52 in 2016 for ₹182 crore. It also operates Addagames, a multi-gaming platform offering card games and ludo. Delta Corp had initially planned a ₹550 crore IPO for Deltatech Gaming in June 2022 but shelved the plan in August 2023 due to GST uncertainties.

Deltatech Gaming also faced a retrospective GST notice of ₹6,384 crore in October 2023. The Supreme Court stayed GST show-cause notices worth ₹1.5 lakh crore in January 2024. In FY24, Deltatech Gaming reported a total income of ₹92.9 crore, contributing 9.46% to Delta Corp’s revenue.

Head Digital Works Strengthens Online Poker Presence with Adda52 Acquisition

For Head Digital Works, this acquisition will boost its presence in the online poker market. The company recently forayed into online poker in September 2023. Deepak Gullapalli, Founder of Head Digital Works, said, “This acquisition will enable us to offer an enriched gaming experience and drive technological advancements.”

Head Digital Works, majority-owned by Canadian private equity firm Clairvest, reported a profit after tax (PAT) of ₹72 crore in FY24, a 24% increase from ₹58 crore in FY23. EBITDA rose to ₹98 crore in FY24 from ₹89 crore in FY23, though margins narrowed due to the 28% GST slab.

The company’s consolidated gross revenue grew 31% to ₹1,378 crore in FY24 from ₹1,051 crore in FY23. However, net revenue remained nearly flat at ₹841.4 crore in FY24, compared to ₹839.1 crore in FY23.

The acquisition will position Head Digital Works to compete with leading online poker platforms like Nazara Technologies’ PokerBaazi, Games24x7’s PokerCircle, Gameskraft’s Pocket52, Mobile Premier League (MPL), and Spartan Poker, which was acquired by OneVerse in February 2024.

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