Sabre rattling by Kejriwal vs. Surgical strike by NAMO
“I have always been a risk taker. It does not scare me. It excites me. I love it” Jaydev Mody, the promoter of Delta Corp said with a glint in his eye, even as Varinder Bansal gazed at him with admiration.
“We have always succeeded in everything new that we have done,” Mody added quickly.
At that time, Jaydev Mody had in mind the menace of Arvind Kejriwal, the leader of the AAM Aadmi Party. Kejriwal is known for his populist measures and quixotic ideas. The AAP has promised in its election manifesto to ban casinos in Goa to “save Goan culture”.
Jaydev Mody had not imagined in his wildest dreams that NAMO would, overnight, wipe out a majority of the user base of the casinos, namely, the black money high-rollers.
Only black money hoarders splurge money in casinos: BJP leader
“Will any honest citizen in this country splurge money like this in a casino? No person likes to splurge money unless you get it by ill-means,” Wilfred Mesquita, a prominent leader of the BJP in Goa once famously said.
“If the Union Government wants to detect black money, here is the place where they can get it. This is a place where black money is spent,” Mesquita alleged, his eyes blazing with fury.
Casinos, a haven for black money hawalas?
Fransisco Miccky Pacheco, who was earlier Goa’s Tourism Minister, accused off-shore casinos of the grave crime of sheltering hawala rackets.
“Money is transacted in these casinos through hawala. The black money is pumped in through these gambling dens as there is no control of Government over them,” Pacheco claimed.
Pacheco also made the shocking allegation that the State Government has absolutely no control over the functioning of these casinos and that they siphon off money by looting the state exchequer.
The veteran legislator claimed that the casino operators fudge the number of visitors and evade the entry fee, which is payable to the State Government.
“Similar is the case with the entertainment tax. They show doctored records so that they have to pay only 20 per cent of the actual tax,” Pacheco alleged.
The legislator claimed that the off shore casino operators have cheated the Government of thousands of crores of rupees.
High-Rollers bring in the big bucks for a casino
It is an open secret that the casinos make their money from the high-flying “high-rollers” i.e. the well-heeled gamblers who are not afraid to splurge large sums of money on wine, woman and song.
Whether these high-rollers have black money or not is not known. However, it is certain that they do not want to leave a paper trail of their activities. They insist on paying in cash.
If the high-rollers are discouraged from visiting the casino, the only customers will be the thrifty tourists who put a few coins in the slot machine. The revenue from them will not suffice to keep the casino afloat.
NAMO creates stampede by discontinuing Rs. 500 and Rs. 1000 notes
Today morning, there were chaotic scenes outside the Delta Corp counter as investors fought with each other to dump the stock. However, there were no buyers.
The lower circuit of 20% saved the stock from suffering further damage.
Delta Corp at 20% lower circuit, govt cracks whip on black money https://t.co/tBt9L9mJBf #news #india #stock
— Latest Newz India (@LatestNewzIndia) November 9, 2016
MMB Punters put up brave face but is it game over for Delta Corp?
The punters at MMB are known for their never-say-die spirit.
“delta will not be effected as it can deposit money in bank” one punter said in a tentative voice, evoking mirth from the other punters for his naivety.
“Delta no effect on black money…..it’s bounce back don’t confuse with black money issue” another punter pleaded. However, his tone was unconvincing and not many paid attention.
Delta Corp lower circuit. Biz model goes out of the window with cash
— Darshan Mehta (@darshanetnow) November 9, 2016
Delta Corp -20% at lower circuit and 40 lkh shares traded at lower circuit
— Nigel D'Souza (@Nigel__DSouza) November 9, 2016
#Delta Corp:From Casino to "Cash No" in a single night. The worst affected company of this black money move.
— Arun Mukherjee (@Arunstockguru) November 9, 2016
Porinju Veliyath claims credit for foreseeing crusade against black money
My Diwali Theme #BlackMoney #ManagementTurnaround on @ETNOWlive with @_nirajshah https://t.co/7CBOkukxkQ
— Porinju Veliyath (@porinju) November 9, 2016
Porinju was quick to draw attention to his talk on the occasion of Diwali where he had predicted that the crackdown on black money would willy-nilly compel managements to abandon their nefarious black money dealings and come clean.
Porinju’s theory is that these companies are presently undervalued owing to the bad reputation of their management but that they will be re-rated when the managements mend their ways.
Red Letter day: Vijay Kedia
Vijay Kedia was his usual cheerful and humorous self. He did not show even the slightest trace of nervousness that his stocks would get pummeled out of shape in the new dispensation. Instead, he said the event “will go down in history as a Red letter day for India”.
Today will go down in history as a Red letter day for India.
— Vijay Kedia (@VijayKedia1) November 8, 2016
She knew it form the start.# insider trading.?? pic.twitter.com/BvpWoL5WYt
— Vijay Kedia (@VijayKedia1) November 9, 2016
Vijay Kedia also sent out the soothing assurance that the “worst is over” and we need not worry anymore:
In my biased view worst is over.
— Vijay Kedia (@VijayKedia1) November 9, 2016
Akin to spiritual cleansing: Vallabh Bhanshali
Vallabh Bhanshali, the legendary merchant banker, has never offered us a stock tip or recommendation. However, he has also never failed to inspire us with his lofty thoughts on the state of the market.
“In field after field, sector after sector I have seen that reform brings only good. The short term pain is normally on the day of the event is seems very big but you will find that human ingenuity will find solutions to it …. we are going to overcome the short term pain much faster than most people think,” Bhanshali assured in a soothing tone.
Shankar Sharma is skeptical and smelt a conspiracy by NAMO
Shankar Sharma is known for his rabid views against NAMO and the BJP. The reason for the hatred is because he was arrested and put in Tihar jail for 74 days by the previous BJP government for various alleged offenses.
“If the BJP had continued in power, I would have either been killed or died of a stroke,” Sharma had then said.
Shankar hinted that the proposal by NAMO to discontinue the notes was with the sinister objective to torpedo the prospects of the opposition parties in the upcoming elections in UP.
Could the demonetization have a link to choking funding for major parties in UP Elections? Food for thought….masterstroke if so…
— Shankar Sharma (@1shankarsharma) November 8, 2016
UP Elections likely to be in January. QED. Maan gaye…
— Shankar Sharma (@1shankarsharma) November 8, 2016
However, Shankar’s diatribe against NAMO did not go down well with his army of followers and they confronted him. Some even equated him to “Kejriwal” for his relentless attack on NAMO, without any regard to the merits of the matter.
Shankar was not cowed down by the criticisms. He gave it back to the detractors:
@time9to4 abey gadhey, na mere paas US citizenship hai, na Indian currency. Par beakal sey kya behas karna
— Shankar Sharma (@1shankarsharma) November 9, 2016
@Horizon_Abhay arrey pachaas saal ki umar mien maikhaane mien hi sukoon milta hai
— Shankar Sharma (@1shankarsharma) November 9, 2016
@Devende27114129 chamchon ko har cheez chamchagiri lagti hai
— Shankar Sharma (@1shankarsharma) November 9, 2016
Conclusion
Prima facie, it does appear that NAMO’s tactical move has crippled Delta Corp’s prospects because the high-rollers who would have been eager to splurge their alleged ill-gotten gains on activities like gambling will now find their wings clipped.
In the absence of the high-rollers, the casino will barely be able to eke out a living. The normal tourists who spend a paltry amount will not send the cash registers ringing. The earnings from them may not support the sky-high valuations at which the stock is presently quoting.
Now we will have to see whether the combined brilliance of Rakesh Jhunjhunwala, Kalpraj Dharmashi and Jaydev Mody is able to rescue Delta Corp in some way or the other or whether it will disappear into oblivion.
I thinks the next step NAMO will take for eradication of black money is sealing of all bank lockers and get it opened for valuation, so the hoarded gold is monetised
Hi, I am a big follower of yours as well as one of the as well as most active MMB member on Delta Corp board. I did not like your calling us a Punter as we work hard to make money and not play at casinos, rather invest in the casino stock, there is a difference. Now coming to Delta’s lower circuit, in my opinion its business model stays intact as the sales and profits reported by the company are all in white money and as the Q3 approaches you will soon see them surpass even the last quarter’s best ever PAT of 31 crores. Q3 historically has been best quarter for goan casino companies, it being best season. Their poker company adda52’s acquisition too is an online payment based model, hence no black money here too and same with ace2three, their rumoured rummy site acquisition in talks. The impact of black money measures shall be short lived on Delta corp as this will further streamline the company’s way of working and solid q3 performance will instill investor confidence like never before. This is not me being optimistic about the company but realistic. What would be more trustworthy, a cleaner delta corp of the future or a dicier one of the past? You may e-mail me personally upon their q3 results if i was right or need introspection. Trust me, the stock just became better for long term holding. Disclosure: I hold and track this company since 2011. I am GP_investor at MMB whom many people follow, and I follow you 😉
true that “” the sales and profits reported by the company are all in white money”” but the guys who come to casino have loads of black money..and is not useful anymore….so, supply may get choked impacting the revenue and profitability of the company..
Still not clear how withdrawal of 500 and 1000 rupee notes and introduction of 2000 rupee notes will help root out corruption. There will be more than adequate supply of 2000 rupee notes and this can be stored in much smaller space. Prevent fake currency? Yes. Corruption – NO. The RTO will still ask for 500 rupees, the building plan approver in the state government will still ask for 5 lakhs to approve my building plan, the factory inspector will still ask for his cut, my flat registration office will still ask for their share. So whom are we trying to fool here by bringing out 2k rupee notes?
It will take a decade or two to generate the kind of black money that already exists. At that time, we can do the purge again. Don’t ask the same Q as pappu.
Did you dream last night it will take decade or two ? Dont talk off the cuff on a subject you dont know. Black money is here to stay, irrespective of your simplistic belief.
Bhai all the money are new after 2005 congress govt. changed all the money so if you see you are not able to find single note before 2005 how it will decade or two I m not understand but Yes it is a good step
Just a day back when an article was posted about Delta corp that Arvind Kejriwal has declared in his election promise that he will ban Casinos in Goa as these are Den of black money and they are polluting the culture of Goans, all the Bhakts started firing Kejriwal. Even the owner of Delta corp said to the extent that gambling is in Indian Culture and 99% of the visitors on this blog supported Delta corp. Now what happened??/ Now please fire at NAMO…. no??? ….hahahaha….
Modi Ji’s efforts are a great step especially for ordinary people like us who do not have much money. Now we will be spending in 100 or lower denomination notes and hence automatically our spending and wasteful expenditure will go down and hence savings will increase which will improve our condition. I urge all citizens to support Modi Ji’s effort and deposit all 500, 1000 notes in the bank as soon as possible and not panic about the situation.
Modiji has done a wonderful job….