DELTA CORP LTD (DELTACORP) Q3 FY22 Earnings Concall Transcript

DELTA CORP LTD  (NSE:DELTACORP) Q3 FY22 Earnings Concall dated Jan. 12, 2022

Corporate Participants:

Hardik Dhebar — Group Chief Financial Officer

Analysts:

Alpesh Thacker — Antique Stock Broking Limited — Analyst

Nitin Dharmavat — Aurum Capital — Analyst

Viraj Mehta — Equirus PMS — Analyst

Manish Ostwal — Nirmal Bang Securities Pvt. Limited — Analyst

Dhruv Shah — Ambika Fincap Consultants Private Limited — Analyst

Tushar Sarda — Athena Investments — Analyst

Hemant K Pant — H. K. Pant & Associates — Analyst

Bhuskhar — — Analyst

Nambi — T. Rowe — Analyst

Ankit Babel — Subhkam Ventures (I) Pvt. Ltd. — Analyst

Kaustubh Pawaskar — Sharekhan by BNP Paribas — Analyst

Anupam Agarwal — Lucky Investment Managers Pvt. Ltd. — Analyst

Vipul Lamba — Lamba Investments — Analyst

Pratik Shetty — Individual Investor — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Q3 FY 2022 Earnings Conference Call of Delta Corp Ltd. hosted by Antique Stock Broking. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Alpesh Thacker from Antique Stock Broking. Thank you and over to you, sir.

Alpesh Thacker — Antique Stock Broking Limited — Analyst

Thank you, Reziya. Hello, everyone, and welcome to third quarter FY 2022 investor conference call of Delta Corp. Today we have with us the management of Delta Corp represented by Mr. Hardik Dhebar, Chief Financial Officer of the Company. The format of the discussion would be brief opening remarks by the management followed by Q&A session.

Without much ado, let me hand over the call to Mr. Dhebar. Over to you, sir. Thank you.

Hardik Dhebar — Group Chief Financial Officer

Good afternoon, everybody. Thank you, Alpesh. Thank you very much for hosting this call this quarter. It gives me great pleasure and with great happiness I want to say that we have, as you all would have seen since yesterday and most of you would have done your bit of analysis and looked at the numbers, to report this has been the highest-ever or the best-ever quarter with the highest-ever revenues, EBITDA, and profit for a particular quarter as far as Delta is concerned. So, that gives me great pleasure and satisfaction reporting that. And when I say satisfaction is because after very tough one, one-and-half year that the entire world at large and the entertainment industry per se has gone through, we have been able to bounce back and bounce back with lot of conviction and lot of resilience so to say.

Having said that, there are headwinds in form of the new variant that we are all again here in the midst of. But thankfully, globally we have seen the reports and it seems that while this remains a variant of concern, it is not as lethal and as mortal as the earlier variants. And therefore, we all believe that this is going to be a short-lived phenomenon and we will be able to come out of the restrictions and start living a normal life pretty soon. And therefore, the only reason I brought this caveat in is because while we have seen a fantastic quarter and we believe that this is something that we can replicate quarter after quarter If the conditions and the situation around us remains pretty much normal, then replicating these numbers may not be too much of an issue. But we have to take into account the fact that in the current quarter that is the January to March quarter, we may have some hindrances and interruptions which could act as a speed breaker of sorts.

But other than that, I think we are in for a good set of numbers like we have demonstrated in the current quarter gone by that is the quarter ending December and we believe that this is historically, we have seen in our business that every few quarters we see a step-up growth coming. That step-up growth remains steady for a few quarters and then the new step-up comes in. So, this becomes the new base of sorts for the next few quarters before we jump up to a new high and then that becomes the base. So yes, pretty much very good contribution across all the operating properties. Sikkim, Daman — sorry, Sikkim, Nepal, everything from a gaming perspective has done exceedingly well. As regards the hospitality play, also I would like to highlight the fact that the hospitality business also has done exceedingly well. We have done probably one of the best quarters as far as Daman is concerned. We had a very, very good November and a very, very good December.

Our Goa hotels did extremely well despite the fact that the hotel is not normally sold like every other hotel because 70% of the rooms are pre-occupied and occupied by our gaming vertical for our guests as a part of the package sale that we do. And therefore given all those facts, I think the hospitality also has contributed exceedingly well. As regards the online piece is concerned, there has been a slight slowness in terms of the revenue and the profitability. But the slowness is very normal and natural so to say given the fact that in the quarter gone by you had the IPL immediately followed by the T20 World Cup. And we have seen this happen every time that a large cricketing event is coming by, a decent size of the wallet share typically gets diverted to the Fantasy League platform and the multi-gaming platform so to say, predominantly on the fantasy cricket side.

Having said that, we mentioned that we have had a small glitch here and there on our technical side, which has all happened in the same quarter and therefore we are seeing some bit of a dip of sorts. But thankfully, all that is behind us and December — in the month of December itself, we have seen the numbers clawing back to the earlier quarters and better quarter numbers. And therefore, we are of a very strong belief and the January trend is also showing that we are well on track to be able to achieve the numbers that we have achieved in the previous quarters notwithstanding what happened in the October to December quarter. We have also launched the multi-gaming platform and have actively started the marketing sales promotion activity for the multi-gaming platform, which basically offers various types of real money games in addition to poker and Fantasy League and rummy.

And the idea is very clear like I have said in the last call also that Poker being a niche and a very specific and specialized market, which you can’t do carpet bombing or do mass acquisition of customers. Therefore the multi-gaming platform thereby becomes a platform, which is going to be utilized to be kind of attracting and acquiring larger number of mass market players coming on to the vertical and the platform, getting introduced to all the games including poker, and from there we try to funnel out the real good serious poker players on to the poker platform and the poker vertical, which then starts generating much larger numbers in terms of the profitability. As you all know, we have at the Delta level taken a resolution in the yesterday’s meeting where we are looking to explore the possibility of doing an initial public offering for the online gaming piece, which in all probability is going to be a combination of a primary issuance along with an offer for sale in form of a secondary issuance by Delta.

The idea is very clear that we genuinely believe that poker per se and online gaming has a very bright future and a very positive future so to say and therefore, a war chest is definitely required if you are looking to grow this business in a multiplier effect going forward from here. And while Delta is definitely flush with lot of funds, at this point of time we are close to around INR500 crores of cash, but Delta has its own commitments and own priorities. And if the online vertical has to grow not at the cost of Delta or Delta has to continue doing what it is doing at the cost of the online; therefore, each of the businesses need to have their own dedicated war chest and that is where the IPO will play a big role. The primary issuance that we do, the money comes into the Company and that becomes a war chest for us to use that money towards marketing spends, acquisition — customer acquisition spends, sales promotion activity to make our brand, our platform, our games more popular and more accessible to a larger audience.

And in addition to the organic growth that we will achieve, there’s always an inorganic opportunity that we will scout for. So, we’ll try and do one plus one is equal to 11 and not one plus one is equal to two. And that is the game plan as far as the online piece is concerned and that is the thought process behind the proposed fund raise that we are looking to do in the online gaming space. With regards to coming back to the offline gaming space, the business has done better than ever before and we are very, very hopeful that it will continue doing this given, like I said, without the constraints being there. On our two projects that we are working on. One is the new vessel, it’s on track and should be ready to be put into operation, like I said, any time in calendar year of 2023. That’s the endeavor.

With regards to the land-based project where we are going to be developing an integrated resort, all the approvals and the area being designated in Investment Promotion zone have all been done. We are awaiting the final approval post the — from the authorities after the cabinet approval that was accorded to the project. So once we get the final approval from the document that they will return, [Technical Issues] break ground. That should happen in this next 15 days to a month’s time and therefore we would aim to break ground in the next three to four months’ time is what we believe.

This is all as far as the brief opening remark is concerned. I’m happy to take questions from the participants and answer to the best of my ability.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Nitin Dharmavat from Aurum Capital. Please go ahead.

Nitin Dharmavat — Aurum Capital — Analyst

Yes. Thank you for the opportunity. My first question is regarding this new variant Omicron and what is the impact that we see on the footfalls in the casinos and hotels and if there is any night curfew impact in Goa. If you can elaborate that.

Hardik Dhebar — Group Chief Financial Officer

So, I did mention a bit about that in my opening remarks. There are restrictions that have been brought in. There is a capacity that has to be — we have to adhere to a capacity requirement. In terms of the visitations into Goa, obviously after the first week in the last few couple we have seen the visitations into Goa drop a little bit. They have not dried up completely, but they have definitely dropped and there is a direct correlation. If you don’t have large visitations happening into the state itself, the visitations to the casino are obviously going to get impacted. Like I said, this is more of a speed breaker given the fact that while you have a bad situation in Delhi where cases are going up and the positivity rate is high, on the other side we are seeing Mumbai which is kind of flattening out and people are talking of Mumbai having hit the peak and now we’ll start seeing the cases go down.

So, we are hoping that we don’t get into any worse situation than this and think we’ll start opening up and we’ll be coming back to near normal pretty soon. But yes, there will be some constraints. Like I also mentioned somewhere that there are elections coming up in Goa. So, that is also going to act as a speed breaker of sorts given that there will be a moral code of conduct that will be there and stuff like that. So given that, we will have to factor in a little bit of slowness in the revenue and in the business and in the visitations so to say. But other than that, I think it should be all pretty fine and normal.

Nitin Dharmavat — Aurum Capital — Analyst

Thank you very much. My second question is regarding the IPO that we are planning. So, have we done any initial estimate about the valuations of this business? Some sense about — some idea if you can give.

Hardik Dhebar — Group Chief Financial Officer

So like I said, the approval from the Board of Delta was required for us to embark on a full-fledged process without which we cannot commence the process because Delta is a 100% shareholder of Gaussian Networks. We have taken that approval yesterday in the Board meeting. And while we have informally had a very, very brief chat in terms of what is the way forward, there are — there is no complete work done on the valuation for the Company that is at the Gaussian Networks per se. But like I said in one of my television interactions this morning is that you have a listed company if not identical, but in a similar real money gaming space in form of Nazara and you have had Dream11 and NPL who have raised money from the private equity space in the recent past. And we all know what kind of valuations they have enjoyed and Nazara what valuation it’s enjoying today on the current space. Now if that is any indication, we should also be looking at a pretty much decent and healthy kind of a valuation so to say. Like I said since we have not been in this area, we will be commencing the work starting [Technical Issues] We should be able to have some clarity in the very near future.

Nitin Dharmavat — Aurum Capital — Analyst

Got it, sir. Thank you so much and all the best.

Operator

Thank you. The next question is from the line of Viraj Mehta from Equirus PMS. Please go ahead.

Viraj Mehta — Equirus PMS — Analyst

Hi Hardik and congratulations for a tremendous set of numbers.

Operator

I’m sorry to interrupt you. But Mr. Mehta, we cannot hear you. Can you speak a little louder?

Viraj Mehta — Equirus PMS — Analyst

Yes. Hi Hardik. Congratulations for a great set of numbers. I had a couple of questions. One was on the new project that we are starting. There are a lot of newspaper reports which say that the clearance has been canceled or approval is not there. Can you tell us the exact status where we are?

Hardik Dhebar — Group Chief Financial Officer

So, there was no clearance that was canceled. It had gone to the cabinet for an approval and one of the cabinet members had put an objection to it. Subsequently, there was a second round of cabinet meeting and what our conclusion is that the project has been cleared by the cabinet. There is no issue on that front. The formal notification and the formal written approval to us will happen in the next 15 days’ time. So as far as the approval for the project is concerned, it is done. But we haven’t yet made any public disclosure to that effect given the fact that we don’t have anything in writing as of now. But in a sense, sure that it has been cleared.

Operator

Does that answer your question, Mr. Mehta?

Viraj Mehta — Equirus PMS — Analyst

Yes. And my second question is — am I audible?

Operator

You are still sounding low.

Viraj Mehta — Equirus PMS — Analyst

Yes. My second question, Hardik, is regarding the new ship that we are talking. Did you mention that our capacity will go up by 250%? Is that correct in Goa, the seating?

Hardik Dhebar — Group Chief Financial Officer

I didn’t mention 250%, but yes, I did mention 2 times to 2.5 times of our current capacity. So, yes.

Viraj Mehta — Equirus PMS — Analyst

Okay. So which then technically means that today if we are doing INR200-odd crores of revenue in gaming post GST, then at — I mean 100% increase or 150% increase post we are able to utilize it completely, we can be looking at a revenue of INR400 crore to INR450 crore quarterly revenue just from offline gaming. Is that a correct assumption? Then that is utilized towards [Speech Overlap].

Hardik Dhebar — Group Chief Financial Officer

First of all, already doing in excess of INR200 crores post GST. So, I don’t know where that number is coming from below INR200 crores. But we are doing in excess of INR200 crores already. Even in this quarter we have done more than INR200 crores of gaming revenue post GST. But again there is — I cannot predict a number what the added capacity or on a full capacity what we’ll do because it’s anyone’s guess. But you can safely assume that it will be much, much higher on a steady state basis or on a normalized situation, it will be much higher than what we are clocking today for sure.

Viraj Mehta — Equirus PMS — Analyst

And when will that ship come onstream?

Hardik Dhebar — Group Chief Financial Officer

In my opening remarks, I did mention that we are looking at the calendar year of 2023, most likely in the first quarter of 2023 but sometime around that time.

Viraj Mehta — Equirus PMS — Analyst

Thank you so much and best of luck.

Operator

Thank you. The next question is from the line of Manish Oswal from Nirmal Bang. Please go ahead.

Manish Ostwal — Nirmal Bang Securities Pvt. Limited — Analyst

Sir, thank you for the opportunity and congratulation to the team Delta to deliver such a strong performance. First question on the update on the Delta entertainment city. What is the update what is happening on that front, sir? Can you update on that project?

Hardik Dhebar — Group Chief Financial Officer

In fact both the questions — the first two questions, we did touch upon this evening. The final approval — the final written approval from the government Is awaited, which should be given to us in the next 15, 20 days. Once the final approval is done, we can start breaking ground in the next two to three months’ time. As far as the project is concerned, it will take us anywhere between 36 to 48 months to complete the project. The project is envisaged to house three hotels, a large 150,000 odd square foot casino, large format retail, multiplexes, water park, amusement park; basically making it a destination, which is like a mini Genting where every member of the family has something or the other to do.

Manish Ostwal — Nirmal Bang Securities Pvt. Limited — Analyst

Right. Second question on the impact of Omicron on our footfall in our casino. So in terms of average daily footfall in December 2021 quarter and the current footfall so what percentage of decline we saw because of Omicron uncertainty?

Hardik Dhebar — Group Chief Financial Officer

So like I answered this question also in a little bit of a similar question was there. While the first 10, 12 days has not seen a large impact as far as the casinos are concerned, but we will start seeing the impact because in the last couple — last few days, the number of people coming into Goa, the number has definitely decreased from what it was on a daily basis. So, going forward we may experience a little bit of slowness and little bit slow or weak visitations into the casino. We will not be able to make an assessment today because for the first 10, 11 days we haven’t seen much of an impact because most of the states and all restrictions have just started coming in whether it is Delhi, whether it is Karnataka, so on and so forth. So we’ll have to wait, but I will — at the same time, I’ll only hope and pray that like the — like it’s anticipated in Mumbai that the curve is flattening or the peak is behind us or the peak will be behind us in a couple of days and things will start getting better. I just hope and pray that the same thing happens across the country and we start going back to normalcy pretty much soon.

Manish Ostwal — Nirmal Bang Securities Pvt. Limited — Analyst

Thanks a lot, sir. And hopefully FY ’23 will be one of the best year for the Delta Corporation.

Hardik Dhebar — Group Chief Financial Officer

Thank you very much.

Operator

Thank you. [Operator Instruction] The next question is from the line of Dhruv Shah from Ambika Fincap. Please go ahead.

Dhruv Shah — Ambika Fincap Consultants Private Limited — Analyst

Yes, hi. Congratulations on a really good performance, Hardik. I have two questions. First is can you quantify the contribution from Sikkim and Nepal?

Hardik Dhebar — Group Chief Financial Officer

So for the quarter, Nepal has been doing anywhere between INR3.5 crores to INR4 crores a month kind of a run rate and Sikkim has also been clocking close to about INR3 crores to INR3.25 crores a month. Now for Sikkim, this is a decent steady state kind of a run rate given that we were doing about INR1 crore in a quarter for the longest period of time and now we are stabilizing at about INR3 crores to INR3.5 crores a month, which is a very, very decent jump. It’s a multifold jump as far as Sikkim is concerned. Nepal, like you all know, it was only in the month of September — from September 8 we started operating Nepal after a gap of two years. Even though we had launched in ’20 — in March 2020, but we hardly operated at all or rather we didn’t operate that casino till as late as September ’21. And for that matter from September to December, the traction has been excellent and especially in the last quarter we have been clocking close to about INR4 crores a month, which is a very healthy sign so to say.

Dhruv Shah — Ambika Fincap Consultants Private Limited — Analyst

So, we can take INR4 crores for Nepal and INR4 crores for Sikkim as a steady state ex of this quarter.

Hardik Dhebar — Group Chief Financial Officer

I don’t know. In fact Nepal could be even better because if things start getting better, things start opening up, tourism in Nepal kicks in again; things can be better. But yes, for good order sake based on the current run rate, that’s what you can make an assumption.

Dhruv Shah — Ambika Fincap Consultants Private Limited — Analyst

But is the size — the casino size in the Nepal as far as the capacity is concerned is bigger than Sikkim?

Hardik Dhebar — Group Chief Financial Officer

As it stands today, yes, Nepal is bigger than Sikkim.

Dhruv Shah — Ambika Fincap Consultants Private Limited — Analyst

Okay. And my second question is any reason why we are not planning a demerger and getting a P/E in the online business rather than going through the IPO?

Hardik Dhebar — Group Chief Financial Officer

I can’t explain this on an investor call, Dhruv. Maybe there are…

Dhruv Shah — Ambika Fincap Consultants Private Limited — Analyst

No. I just wanted to know why IPO and not demerge. That’s what my question is because if it’s an IPO, then the online gets a holding company discount. That’s the only question I had not the fundraising route.

Hardik Dhebar — Group Chief Financial Officer

We have examined. There are constraints around everything. What we think is best for unlocking the shareholder value is what we are doing and at an opportune time and if there is a structure possible to demerge it, we’ll obviously do a demerger as well.

Dhruv Shah — Ambika Fincap Consultants Private Limited — Analyst

Okay, great. And congratulations once again on a really good set of numbers. Thank you so much.

Hardik Dhebar — Group Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Tushar Sarda from Athena Investments. Please go ahead.

Tushar Sarda — Athena Investments — Analyst

Yes. Thank you for the opportunity. I think in some of the past calls, you have spoken about getting in more high stake players at Goa. So if you can talk about this in terms of the results in the current quarter. What has been the strategy and how much percentage of betting has increased per individual kind of thing? If you can give some color on that, that would be helpful. Thank you.

Hardik Dhebar — Group Chief Financial Officer

So I think the clarify first of all, I have always maintained and all my transcripts and recordings are on the public platforms available that we are not a high roller market like the Macau or the Singapores of the world. So, I don’t know from where that information is coming that we are focusing on high rolling players or getting high rolling players into Goa. What I have always said is that we are focusing on members who are potentially higher spenders than the walk-in crowds that come into Goa. So, you have three types of categories if I was to categorize the business or the customers. One is the pure tourist walk-in who comes in, buys a ticket — buys an entry fee and effectively ends up spending INR8,000, INR10,000 a person. Then there is a club Deltin member or our regular players who basically spend anywhere between INR25,000 to maybe INR1 lakh per person.

And then you have again one high roller, but maybe as not the high roller by the world definition, but somebody who spends in excess of INR1 lakh up to maybe INR1.5 lakhs, INR2 lakhs or something like that. That is a very, very small category as far as we are concerned. We do not cater to that category and we do not — because a large portion of that business is dependent on credit and as you all know, we do not extend credit to our players. And therefore we are more focused on people who want to swipe their credit cards, debit cards, or pay us the money across the table. And our regular gamers and the club Deltin members are somebody who have a high repeat value, a high potential of spending anywhere like I said between in excess of INR25,000 all the way to INR1 lakh, INR1.5 lakh also sometimes.

So, that is the category that we want to focus on and that is the category that we are focusing on to be honest. We have about 5,000, 6,000 club Deltin members and we are adding those club Deltin members on a daily basis. The moment I’m able to create a mix where today our mix would be 40%, 50% 60% of people who are tourists and walk-ins and about 30% coming from my club Deltin guys and then a very small percentage on the so-called high rolling community. The moment that club Deltin share starts eating into the walk-in share, my revenue per person will obviously have a decent amount of jump from INR10,000 to INR25,000 per person or INR30,000 per person and thereby registering a growth in the overall revenue as well. So, that’s what it is. As regards the mix is concerned, yes, we are looking to filter out more riff-raffs and more walk-ins for the club Deltin members thereby they will utilize their time gainfully for us and we will be able to make more money within the same space and same time frame.

Tushar Sarda — Athena Investments — Analyst

I get your point, sir. That’s what actually I wanted to understand. Maybe the word high roller I used was not right. But the mix seems to have changed favorably this quarter for you. Would that be a right understanding because the revenue has gone up substantially, right, beyond your seat capacity?

Hardik Dhebar — Group Chief Financial Officer

While the mix is definitely more favorable, we have definitely focused because we have two issues. One, obviously people coming into Goa, we want only good — when I say good people as in who are serious gamers or more focused gamers to come in because I have the COVID restrictions to follow, I have the time constraints that are there. So, I would like to make the most from the time that is available and the constraints that I have to abide by. So yes, the mix has changed, but it is not very dramatic at this point of time like we would like it to be. But we are working towards changing the mix even better in our favor.

Tushar Sarda — Athena Investments — Analyst

So, then what has driven such a strong revenue growth? If it’s not the mix, then what is the reason for such a strong revenue growth?

Hardik Dhebar — Group Chief Financial Officer

So, I think — so I did not say the mix has not changed. The mix of definitely changed, but it is not dramatic like I would want it to be. But the mix has definitely changed. The footfalls — because there have been no footfalls and you’re all of a sudden seeing decent amount of footfalls also happening so it is a mix of per person spending power, the change of mix, and the footfalls all coming together has given us the growth that we have seen or the revenue that we have seen.

Tushar Sarda — Athena Investments — Analyst

Okay. Thanks. And really superb results and wish you all the best. Thank you so much.

Operator

Thank you. The next question is from the line of HK Pant from H.K. Pant & Associates. Please go ahead.

Hemant K Pant — H. K. Pant & Associates — Analyst

Thank you for giving the opportunity. I just wanted to know the project of Daman, is there any chances of casino to be in Daman?

Hardik Dhebar — Group Chief Financial Officer

So as far as the Daman casino is concerned, the final hearing should be starting somewhere in the month of February. As you all know, there is a writ petition that we had filed and now the final hearing is slated to start somewhere in the month of February and we are hopeful that we should get answer one way or the other pretty soon. As far as we are concerned, we genuinely believe that legally we have a very strong wicket and we should get a — we hope and we believe that we have a strong case and therefore keeping fingers crossed and hoping for the best.

Hemant K Pant — H. K. Pant & Associates — Analyst

Thank you very much and best of luck. Thank you.

Operator

Thank you. The next question is from the line of Bhuskar from [Indecipherable]. Please go ahead.

Bhuskhar — — Analyst

Hi, sir. So, just a clarification question. The entity that we are planning to launch the IPO, we have invested INR290 crores in the same company, right, up till now?

Hardik Dhebar — Group Chief Financial Officer

INR290 crores is the valuation, the book value of the company. But the acquisition cost when we did the acquisition in 2017 was INR223 crores. And INR290 crores is the fair valuation as it stands today.

Bhuskhar — — Analyst

Okay. And the same company has recorded about INR29 crores profit for FY ’20, right?

Hardik Dhebar — Group Chief Financial Officer

It’s all there out in the open. Why do you want this to be confirmed? It is audited, right.

Bhuskhar — — Analyst

No. So I was just — because there are two companies by Lucia name so I was just confirming if it was INR290 — it’s the same company that you were talking about. Thanks a lot.

Operator

Thank you. Next question is from the line of Nambi [Phonetic] from T. Rowe [Phonetic]. Please go ahead. Mr. Nambi, may we request you to please unmute yourself if muted from your handset.

Nambi — T. Rowe — Analyst

I’m audible now. First of all, congratulations on the success. My question is are there any other foray into other countries expansion of Delta business?

Hardik Dhebar — Group Chief Financial Officer

We already are present in Nepal and we have always said that the Indian subcontinent is something which is what we will keep on exploring and then when opportunity comes up, we would be happy to grab that opportunity and have a foot in the door. A couple of years ago or rather a few years ago, Sri Lanka did present an opportunity. However, there has been regime change and law change that has happened there. So while we acquired a parcel of land with a view to build a casino and operate a casino in Sri Lanka, because of the law not being favorable and the regime not in favor of amending their laws, that never took off and therefore we are also in the process of selling off the land in Sri Lanka very soon. But like I said, Nepal was an option that came by and we explored that opportunity by commencing a casino in Kathmandu, Nepal. As and when we get an opportunity in the Indian subcontinent, for sure we will explore that opportunity.

Nambi — T. Rowe — Analyst

Thank you so much.

Operator

Thank you. [Operator Instructions] The next question is from the line of Ankit Babel from Subhkam. Please go ahead.

Ankit Babel — Subhkam Ventures (I) Pvt. Ltd. — Analyst

Good afternoon, sir, and congrats for a good set of numbers. Sir, my first question is that in the result release, it is mentioned that there were still restrictions to operate casinos at full capacity in Q3. So, could you just mention what was those restrictions?

Hardik Dhebar — Group Chief Financial Officer

The restrictions were basically on the capacity were restricted existed in terms of you could only have 50% of your capacity or 75% of the capacity at some point of time. No other restrictions.

Ankit Babel — Subhkam Ventures (I) Pvt. Ltd. — Analyst

Okay. So actually what I need to understand is suppose if there were no restrictions, then what could have been the normal potential of Delta Corp in the gaming — offline gaming vertical?

Hardik Dhebar — Group Chief Financial Officer

Ankit, it’s very difficult to answer this question. It’s not a cement plant where I say that it’s a 1 million ton capacity and I operated at 0.5 million ton therefore this is it. If it becomes 1 million ton, I’ll do this. This is a very different business so to say. So, very difficult to gauge that.

Ankit Babel — Subhkam Ventures (I) Pvt. Ltd. — Analyst

So, I’ll ask the same question in other words. So, was there any situation in Q3 wherein there were customers who would like to visit your casinos, but they were denied due to those restrictions?

Hardik Dhebar — Group Chief Financial Officer

Yes. There have been times.

Ankit Babel — Subhkam Ventures (I) Pvt. Ltd. — Analyst

Okay. And we have been reading in the press, don’t know whether that is official or not, but due to this new variant, has there been any government regulation in Goa to operate your casinos at 50% capacity?

Hardik Dhebar — Group Chief Financial Officer

I just now told you that the restriction is 50% capacity.

Ankit Babel — Subhkam Ventures (I) Pvt. Ltd. — Analyst

Okay. As of date, it is 50% capacity. And sir, though your numbers doesn’t suggest, but is there any seasonality in your business in the offline casino segment on a quarterly basis?

Hardik Dhebar — Group Chief Financial Officer

No, there is no seasonality.

Ankit Babel — Subhkam Ventures (I) Pvt. Ltd. — Analyst

No seasonality. So if things are normal, the current as you mentioned in your opening remarks also that you can replicate these numbers quarter-on-quarter if things are normal.

Hardik Dhebar — Group Chief Financial Officer

That is what should happen in an ideal world.

Ankit Babel — Subhkam Ventures (I) Pvt. Ltd. — Analyst

Okay. That’s it from my side. Thank you, sir.

Operator

Thank you. The next question is from the line of Kaustubh Pawaskar from Sharekhan by BNP Paribas. Please go ahead.

Kaustubh Pawaskar — Sharekhan by BNP Paribas — Analyst

Yes. Good afternoon, sir. Thanks for giving — congrats for good set of numbers. The projects which are coming up in Goa, can you just help us with the capex for both the projects — capital expenditure you’re planning to do? And how the funding of the projects would be?

Hardik Dhebar — Group Chief Financial Officer

There is only one project that we have in Goa which is a land [Technical Issues] integrated township that we are — integrated casino resort that we are looking at. I don’t know which other project. If you are referring to the vessel, then yes, there is — that is the other project. The vessel would cost us anywhere close to about INR200 odd crores for constructing the vessel. As regards the integrated casino/resort project is concerned — integrated resort project is concerned, that would be anywhere between INR1,700 crores to INR2,000 crores give and take which will be spread over the next 48 months. So in all, we are looking at about 2,200 crores of capital expenditure over the next four to five years. Where will the money come from? Like I said, we have about INR500 crores of cash that we have sitting on currently as we speak. Based on the current run rate and if everything was to be normal and will be stagnated — even if we stagnate it at these numbers, we are looking at INR400 plus crores of cash that we will generate every year.

And for the next four years that will make it about INR1,600 crores plus the INR500 crores that we have, that makes it INR2,100 crores. In addition to that, we have a land parcel in Sri Lanka which is up for sale which would fetch us anywhere between INR35 crores and INR40 crores. And in addition to that, we have a large stake in a company called Advani Hotels & Resorts, which is roughly about INR125 crores — INR130 crores worth of stake is there. So you add all that, we will be in excess of INR2,200 crores, INR2,300 crores of cash that we can generate in the next four to five years. This means that I will be able to not only complete the project, but I will not need any outside funding or debt funding so to say. And in fact we should remain cash surplus even after all this given the fact that we are doing value unlocking as far as my online gaming business is concerned and a portion of the offering is going to be an offer for sale by Delta, which will generate some cash for Delta as well.

Kaustubh Pawaskar — Sharekhan by BNP Paribas — Analyst

Right, sir. Sir, any kind of expenditure you’re planning to do for building up a casino in Daman? For that you don’t require any capex as such?

Hardik Dhebar — Group Chief Financial Officer

The casino in Daman is pretty much ready. What — if at all we require anything is probably the machines and the tables, which will not cost more than INR10 crores, INR15 crores. And the moment we get a final approval from the government subject to the outcome of the court decision, we should be able to operate the casino within a couple of months from the time we get the go ahead. And like I said, we’ll not be requiring more than INR15 crores, INR20 crores of capital expenditure so to say.

Kaustubh Pawaskar — Sharekhan by BNP Paribas — Analyst

Right, sir. Sir, you just mentioned that there is no seasonality in the business. Just wanted to understand if your business — can we consider that the weekend footfalls would be much, much higher than what it would be in the weekdays? Any color on that?

Hardik Dhebar — Group Chief Financial Officer

So, I think there was a time when that was true. But now as somebody recently told me, Monday is the new Sunday for Goa. So a lot of people because the flights become very expensive on Sunday to go back out of Goa, people try and extend their stay into Monday. So while yes, it is true that the weekend starting Thursday, Friday onwards rush will be more as compared to a Monday, Tuesday, Wednesday; but I think it’s not — it’s more and more getting even spread out across the week rather than weekends being extra busy. They are busier than what they are on a normal day, but yes, still weekends will always be better than the weekdays.

Kaustubh Pawaskar — Sharekhan by BNP Paribas — Analyst

Right, sir. And one last one if I can. Sir, you just mentioned that you have around 8,000 members for your Deltin — club Deltin. Any target as such that this membership should go up to this particular number and what kind of activities you are doing to add more members under your club Deltin?

Hardik Dhebar — Group Chief Financial Officer

So, there is no target as to what that number should be. We would like that to grow to as big a number as possible and we will also want that every members from that list are more actively and more repeatedly coming to the casino. That is the endeavor. With regards to activities, currently what — there are certain things that are offered as attraction of the membership on achieving — it’s like a normal frequent flyer program of sorts that you have. When you are a base member, there are certain benefits; when you go to the silver category, you get a certain benefit; then you go to gold and then you go to platinum. So similarly we have tried within the limited offering and constraints that we have whatever best we can offer to a club Deltin member whether it is entry — free entry to the casino or a free air ticket or something like that. Those are the types of deals that we offer.

Kaustubh Pawaskar — Sharekhan by BNP Paribas — Analyst

Sure. Thank you. Thanks for that.

Operator

Thank you. The next question is from the line of Anupam Agarwal from Lucky Investment Managers. Please go ahead.

Anupam Agarwal — Lucky Investment Managers Pvt. Ltd. — Analyst

Hi, sir. Good afternoon and congratulations on good numbers. Hardik, if you could just explain us the representation that we had made to the government with respect to the license fee waive off for the period that we were not operational? So anything on that that you can highlight?

Hardik Dhebar — Group Chief Financial Officer

So well, the government has not demanded anything for that period whether it is for the previous year or for the current year. However, they have not yet come out in black and white saying that whether there is a 100% waiver or 50% waiver or what the situation is. And now with the code of conduct already kicked in to Goa given the elections happening soon, I don’t think that decision or that segment will come out anytime soon. But the fact that they have not demanded for the last one, 1.5 years; I don’t think the intention is for anything else but to let it be the way it is. As regards we are concerned, like I have mentioned it earlier as well, from our side we have made the provision for the license fee as if it was payable.

So, there is an amount of about INR95 crores which is between the last year and this year that we have provided for in the P&L, which once we get clarity can be reversed and it will positively impact the P&L and profitability of the Company. From a tax perspective, we — for whatever tax disallowance we had to do on those fees because there is a statute which says that a government levy even though not paid, you have to opt it for tax if it is not paid for a certain period of time. So, we have already paid tax on it. So from a compliance and taxation perspective, we are completely above board. So as and when the government makes its decision and lets us know what needs to be done, whether it’s a full reversal or a part reversal or whatever that maybe, that will only come as a positive and a benefit to the P&L of Delta and nothing else.

Anupam Agarwal — Lucky Investment Managers Pvt. Ltd. — Analyst

Understood. Is it possible — secondly, is it possible if you could quantify the visitation number for the quarter gone by?

Hardik Dhebar — Group Chief Financial Officer

Sorry, I couldn’t hear you properly.

Anupam Agarwal — Lucky Investment Managers Pvt. Ltd. — Analyst

Is it possible to quantify the number of visitations gone by for the quarter?

Hardik Dhebar — Group Chief Financial Officer

We typically don’t publish out those numbers, but we have been doing more or less in line what we were doing in the previous quarters. So about close to about…

Anupam Agarwal — Lucky Investment Managers Pvt. Ltd. — Analyst

1.5 lakhs?

Hardik Dhebar — Group Chief Financial Officer

Close to 100,000 not 1.5 lakhs because given the constraints that we were going through because of COVID, it’s not gone to that 1.5 — 1,40,000, 1,50,000 a quarter. Slightly lower, but I think like I just mentioned to somebody, the mix is better, therefore the value is compensating for the volume.

Anupam Agarwal — Lucky Investment Managers Pvt. Ltd. — Analyst

Understood. That’s all from my side. Thank you and wish you all the best.

Operator

Thank you. The next question is from the line of Vipul Lamba from Lamba Investments. Please go ahead.

Vipul Lamba — Lamba Investments — Analyst

Yes, hi. Thanks for taking my question. So Hardik, just wanted to check on our Fantasy game platform. How has been the response on that as we have seen in non-listed space there has been companies who are growing at a tremendous pace in the sector? Also in the IPO in that company, is the Fantasy platform also part of that?

Hardik Dhebar — Group Chief Financial Officer

So first of all, we don’t have a separate Fantasy platform per se. Fantasy platform is a part of Adda Motion Networks itself. It offers Adda52 within the poker vertical and it offers adda.games which is the multi-gaming platform; which offers the Fantasy lead, the poker, the rummy, and the other real money games such as Klondike, Group Ninja, the Sliced Ninja, whatever the other games are. And it is Gaussian Networks that is being IPOed so everything is being IPOed. As regards growth is concerned, on the multi-gaming platform we are a very new entrant in this space. It’s only been really three, four months; but operationally it’s been about nine months that we launched this platform somewhere in April. But the real focus and the real action and activity has started in the last three, four months. I think from a registration perspective, we have between the two verticals — between the rummy and the multi-gaming platform, we have in excess of about 2 million or about close to 2 million registered users already.

And the active user base between the two would be close to about 40,000, 50,000 — sorry, the active user base would be about 20,000, 25,000 between rummy and the other multi-gaming platform put together. The reason why we may not be growing the way the other multi-gaming platforms are growing is because we have as a strategy and as a policy never chased growth at the cost of profitability. We are going to chase growth even now going forward, but we will not be chasing it blindly so that we keep burning tons and tons of money. We will burn money. We will probably lose a little bit of money, but we will not be losing the kind of volumes in terms of the money that the others are losing. But we — with our strategy and our focus, we are very clear we have been able to grow back our numbers from where we were. And with our strategy, our focus, and the war chest that we will have post the IPO; I think we are definitely slated in for a good growth.

Vipul Lamba — Lamba Investments — Analyst

Okay. Just an add-on, just a clarification. So, this platform doesn’t include any sports related real money games?

Hardik Dhebar — Group Chief Financial Officer

The fantasy is a sport related money game. So we do basketball, we do cricket, we do football.

Vipul Lamba — Lamba Investments — Analyst

It’s part of that — the same platform, right.

Hardik Dhebar — Group Chief Financial Officer

That’s right.

Vipul Lamba — Lamba Investments — Analyst

Thank you.

Operator

Thank you. The next question is from the line of Pratik Shetty, an Individual Investor. Please go ahead.

Pratik Shetty — Individual Investor — Analyst

Hi. Thanks for the opportunity. Congratulations on a great set of number. My question is regarding competition in the online space. So currently I think in the poker space series, there are around three or four players who have like a decent user base and in my personal opinion, couple of them even have better user experience than Adda. Do you think going forward this will be like the winner takes all or is there room for three or four players to comfortably trail here?

Hardik Dhebar — Group Chief Financial Officer

So if it is a winner takes all situation poker, we are the winners and we are — we should be taking it all. We are the largest poker platform in the country today with the largest number of liquidity, with the highest number of registered users, etc. etc. So from that perspective, yes, we are there right at the top. But I don’t think that it is a winner takes all. There is room for a Number 2 or Number 3 runner, the market is big enough. And therefore, I don’t see — you will definitely see some reason between now and then and you will have players falling out in the way, merging etc. etc. I don’t think it’s a winner takes it all situation as yet.

Pratik Shetty — Individual Investor — Analyst

Great. So second — my second question is regard to the fundraising. So basically the focus of this IPO is just fund infusion or will we be even looking for strategic partners maybe in the tech expertise — who have tech expertise and later on maybe run this company like an agile startup?

Hardik Dhebar — Group Chief Financial Officer

So, we are already running this company like an agile startup. We have over the last two years built a very good back-end team in terms of tech, in terms of CRM, in terms of business intelligence, and everything. And that is why we did invest a lot of money into our back-end, into our people, and building up our robust team. So I think — and it is anyways run like an agile startup separately. There’s no overhang from Delta’s offline gaming business or vice versa. The HR policies, the practices, everything is very different. So, it’s already being run that way. And as a part of the IPO, there is obviously a pre-IPO piece that is available for me to place out. So if a strategic investor, whether it it’s from a tech space or from a strategic space who wants to come in and participate, we would be able to offer that as well. But otherwise, the funds figure is purely coming into the Company. There is a mix of primary and secondary like I have explained and the bulk of the money is going to come into the Company as a war chest for future acquisition of players, marketing, brand, sales promotion, and growth.

Pratik Shetty — Individual Investor — Analyst

Okay. So even right now, internal expertise is enough to kind of — so you do not require a strategic tech partner as of now. Internally your resources can handle everything that is required in the online gaming platform, is it?

Hardik Dhebar — Group Chief Financial Officer

We are currently handling and we can handle it. But every time you ask the question is that this enough, the answer is always going to be no because you want to grow bigger, you want to grow faster, you want to grow better and there is always somebody who knows better than you and more than you. So if you can partner with that person, it’s always going to be a win-win for both of them.

Pratik Shetty — Individual Investor — Analyst

Great. That would be all from my side. Good luck.

Operator

Thank you. Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to the management for closing comments.

Hardik Dhebar — Group Chief Financial Officer

Well, I think that was a great interaction covering almost all topics, areas, and issues that probably anybody could think of. And I think I have answered to the best of my ability and with my opening remarks also try and address whatever ups and downs that we could face. I think there’s nothing more to add from my side. Thank you very much for participating and being on this call. Thank you. Alpesh. I hand back to you.

Alpesh Thacker — Antique Stock Broking Limited — Analyst

Thank you, sir. On behalf of Antique Stock Broking, that concludes the conference. Thank you for joining us today. You may now disconnect your lines.

Operator

[Operator Closing Remarks]