Delta Corp, India’s listed casino and gaming company, has agreed with Head Digital Works (Head Digital) for the acquisition of Deltatech Gaming (DGL), which operates the online poker platform Adda52, by Head Digital, which runs the online rummy and poker platform A23.
The transaction, valued at approximately Rs 491 crore, will take place in two phases: an initial acquisition of a 51 per cent stake in DGL by Head Digital, followed by a merger of DGL with Head Digital.
Upon completion of the merger, Delta Corp will hold a 5.7 per cent stake in Head Digital. Adda52 is among India’s oldest online poker platforms, while Head Digital, a pioneer in online gaming, operates A23 Rummy, one of India’s largest real-money rummy platforms with over 75 million users.
Delta Corp managing director Ashish Kapadia commented, “We are excited about this journey with Deepak and his team, whose leadership has been instrumental in shaping India’s online rummy market. We believe this transaction will strengthen Adda52’s leading position in the online poker sector.”
Head Digital founder and chief executive officer Deepak Gullapalli said, “Head Digital is a pioneer in India’s online gaming industry, and we are thrilled to collaborate with one of the country’s most recognised poker brands, Adda52. This deal will enhance our poker business and help us build a leading diversified card gaming platform.”
The acquisition of 51 per cent of DGL by Head Digital is expected to be completed by 6 April 2025, at which point DGL will cease to be a subsidiary of Delta Corp. The subsequent merger of DGL with Head Digital is subject to approvals from the shareholders of both companies and the National Company Law Tribunal and is expected to be finalised by 30 June 2026.
The transaction assigns an enterprise value of approximately Rs 491.26 crore to DGL. Head Digital’s 51 per cent stake in DGL will be acquired through a combination of primary subscription and secondary acquisition from Delta Corp, for a total cash consideration of Rs 34.8 crore and an equity swap in Head Digital. Delta Corp is set to acquire approximately 2.8 per cent of Head Digital’s shareholding by 6 April 2025, increasing to 5.7 per cent upon completion of the merger.
For the financial year ending 31 March 2024, on a standalone basis, DGL reported revenue of Rs 92.93 crore, contributing 13.77 per cent of Delta Corp’s total income. On a consolidated basis, its revenue stood at Rs 92.93 crore, representing 9.46 per cent of Delta Corp’s total income. The company’s net worth stood at Rs -3.48 crore.
Head Digital reported an annual turnover of Rs 841.39 crore in FY 2023-24, with a net worth of Rs 880.99 crore. In the previous financial years, its turnover was Rs 839.13 crore in FY 2022-23 and Rs 721.89 crore in FY 2021-22.
The transaction is subject to customary conditions, including shareholder approvals. Delta Corp and Head Digital have provided mutual representations, warranties, and indemnities within agreed financial caps. Delta Corp has also agreed to a five-year non-compete and non-solicitation clause following Head Digital’s acquisition of the 51 per cent stake in DGL. As a minority shareholder in Head Digital, Delta Corp will be subject to restrictions on dealing with its shares and will receive customary minority shareholder rights.
Indium Capital Advisors acted as the exclusive investment banking advisor, with legal counsel provided by AZB & Partners for Delta Corp and Spice Route Legal for Head Digital.
