News of the central government pondering over the merger of the Union Territory of Daman and Diu into Gujarat has resulted in Delta Corp stock prices to drop drastically early this week. Delta Corp is presently India’s largest gaming company and the sole one to be listed on BSE.
Times of India reported news of a merger and stated that the move was being considered to control the flagrant misuse of alcohol in the Union Territories. A final call is to be decided after the Prime Minister, Narendra Modi’s visit to Diu in mid-April. The territory is notably populated by tourists for its verdant beaches and holiday resorts. Also, the area is conveniently close to metros, such as Mumbai and Ahmedabad.
Delta Corp has constructed a huge holiday resort in Daman and had bragged of building India’s largest casino there, with interior decoration designed by a Las Vegas firm, in 2014. However, the gaming plan is yet to kick start, due to stuck licenses from the central government.
Over the past year, Delta Corp shares had displayed immense growth and the potential had attracted the likes of mega-investor Rakesh Jhunjhunwala. In November, 2016, Delta shares had shot up by 5% after Jhunjhunwala purchased 12.5 lakh shares for INR 106/ each.
However, on Monday shares of Delta Corp dropped by 17% from a high of INR 218 (US $3.37) to INR 179 following a 52-week high. The prices did stabilize on Tuesday but only by 1.5%.
Several people are dismissing the news of the merger as speculation, while companies in the area are hoping that the government will stop from such a move, keeping in mind the financial ramifications.
Along with Goa and Sikkim, Daman and Diu are the only regions where gambling and poker in India is legal.
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