Nazara Tech and Delta Corp shares hit hard due to GST increase

12 Jul 2023 , 11:58 AM

In Wednesday’s trading, shares of digital gaming & esports company Nazara Technologies fell over 14%, while Delta Corp’s hit the 10% lower range after the GST Council, presided over by Union Finance Minister Nirmala Sitharaman, approved the imposition of a 28% GST on online gaming, horse racing, and casinos at full value at its 50th meeting in Delhi.

The GST Council resolved on Tuesday to impose a 28% tax on the total amount of money consumers pay in a blow to the nation’s online gaming industry. Online gaming will also be subject to GST, which will be levied regardless of whether the game is based on skill or chance.

Regarding the rise, Nazara Technologies stated that the decision by the GST Council to impose a 28% goods and services tax (GST) on online gaming will only be applicable to the skill-based real money gaming portion of its business, which generated 5.2% of the company’s entire consolidated revenue in FY23.

The company stated in an exchange statement that it ‘will take proactive steps to mitigate any potential impact to this segment of our business, and we anticipate minimal impact to our overall revenues.’ The statement read, ‘The company remains committed to its growth agenda and will continue to pursue organic and inorganic opportunities across the various operating segments.’

Nazara Technologies’ shares were 6.8% lower at Rs 658.5 at 9:37 a.m. At the same time, shares of Delta Corp were frozen at Rs 222.1 on the BSE in the 10% lower circuit.

It has been dubbed ‘unconstitutional and irrational’ by industry stakeholders. Companies claimed the ruling might have an effect on investments and employment in the sector.

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