Indian online gaming companies' shares fall on 28% tax blow (updated)

Delta

12/07/2023 05:50

(Adds background and Nazara Technologies statement in
paragraphs 2-5, share movement in paragraphs 6 and 7)
       BENGALURU, July 12 (Reuters) - Shares of Indian online
gaming firms Nazara Technologies  NAZA.NS , Onmobile Global
 ONMO.NS , and Delta Corp  DELT.NS  slid on Wednesday, a day
after the government imposed a 28% tax on the funds collected by
online gaming companies from customers.
    Some industry representatives said the tax would eat into
earnings despite Finance Minister Nirmala Sitharaman saying the
decision was taken after consultation with states and had no
intent to hurt the industry. 
        Nazara Technologies 
    said
     on Wednesday that the tax will apply only to the
skill-based real money gaming segment of its business, which
they say contributed 5.2% to consolidated revenue in fiscal year
2023. 
  
        The company added that it anticipates minimal impact to
its overall revenue. 
  
        The tax will not differentiate skill-based games from
those based on chance, Maharashtra state minister Sudhir
Mungantiwar 
    said
     on Tuesday. 
  
        Shares of Nazara Technologies and Onmobile Gaming fell
as much as 14.2% and 8.9% before they trimmed some losses. Delta
Corp slipped 10% to hit its lower circuit. 
  
        Nazara and Delta have risen 21.6% and 15.9%,
respectively, so far this year as of Tuesday's close, while
Onmobile has fallen 11.9%. 
  

 (Reporting by Varun Vyas in Bengaluru; Editing by Savio D'Souza
and Sonia Cheema)
 ((varunvyas.hebbalalu@thomsonreuters.com;))