Shares of Indian online gaming firms Nazara Technologies, Onmobile Global, and Delta Corp slid on Wednesday, a day after the government imposed a 28 per cent 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 per cent 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 per cent and 8.9 per cent before they trimmed some losses. Delta Corp slipped 10 per cent to hit its lower circuit.
Nazara and Delta have risen 21.6 per cent and 15.9 per cent, respectively, so far this year as of Tuesday's close, while Onmobile has fallen 11.9 per cent.