Delta Corp to merge Deltatech Gaming with Head Digital in Rs 491cr deal

Delta Corp Limited has entered into a definitive agreement to merge its wholly owned subsidiary, Deltatech Gaming Limited, with Head Digital Works Private Limited in a transaction valued at approximately ₹491 crore. As part of the deal, Head Digital will initially acquire 51% of Deltatech Gaming’s shares before executing a full merger, in which Delta Corp will retain a 5.7% stake in Head Digital. The move is seen as a significant consolidation in India’s online gaming sector, particularly in the online poker and rummy markets.

Deltatech Gaming operates Adda52, one of India’s oldest online poker platforms, while Head Digital runs the real-money gaming brand A23, known for its online rummy offerings. The deal is expected to expand Head Digital’s gaming portfolio, creating a dominant force in India’s digital card gaming space.

51% Stake Acquisition Paves the Way for Full Merger

The agreement was finalized on 20 February 2025, with Head Digital set to acquire a controlling 51% stake in Deltatech Gaming by 6 April 2025. Following this, the two companies plan to merge, pending shareholder and regulatory approvals, with the merger expected to be completed before 30 June 2026.

Under the terms of the deal, Head Digital’s acquisition of the majority stake will involve a combination of a primary subscription, a secondary acquisition, and an equity swap. Delta Corp will receive approximately ₹34.8 crore in cash, while the remainder of the transaction value will be executed through a share swap.

Strategic Expansion in India’s Online Gaming Market

Delta Corp’s Managing Director, Ashish Kapadia, indicated that the company views this merger as a means to strengthen Adda52’s position in the market, aligning it with one of the leading names in India’s online gaming space. He stated that Head Digital’s leadership in online rummy, combined with Adda52’s strong poker user base, would create a diversified and dominant gaming platform.

Head Digital CEO Deepak Gullapalli also emphasized the strategic value of the merger, stating that the integration of Adda52 into the A23 brand would enhance Head Digital’s offerings in the online poker segment while consolidating its position as a leader in India’s online gaming industry.

Financial and Regulatory Implications

The transaction ascribes an enterprise value of ₹491.25 crore to Deltatech Gaming. Following the completion of the initial 51% stake sale, Deltatech Gaming will cease to be a subsidiary of Delta Corp. The full merger will require regulatory clearance from the National Company Law Tribunal (NCLT) and approval from the shareholders of both companies.

Delta Corp is expected to gain long-term value from its minority stake in Head Digital, which has demonstrated strong financial performance. In FY2024, Head Digital recorded an annual turnover of approximately ₹841 crore, with a net worth exceeding ₹875 crore. The company has been a leading player in India’s online real-money gaming sector for over 15 years, primarily focusing on card-based gaming formats.

Implications for India’s Real-Money Gaming Industry

The merger between Adda52 and A23 is expected to have far-reaching implications for India’s online gaming market, particularly in light of increasing scrutiny from regulators regarding real-money gaming operations. As the industry continues to expand, consolidation among key players is anticipated to be a growing trend.

While the transaction signals an aggressive push toward market dominance, the companies will need to navigate evolving regulatory frameworks and potential taxation concerns related to online gaming.

The extra-ordinary general meeting (EGM) for Delta Corp shareholders to approve the transaction is scheduled for 21 March 2025.