Despite Finance Minister Nirmala Sitharaman saying that the decision was taken after consultation with states and there was no intention to harm the industry, some industry representatives said the tax would hit earnings.
Nazara Technologies said on Wednesday that the tax would apply only to the skill-based real money gaming segment of its business, which it says was to contribute 5.2% of consolidated revenue in fiscal 2023.
The company said it expects a minimal impact on its overall revenue.
Maharashtra state minister Sudhir Mungantiwar on Tuesday said the tax will not differentiate skill-based sports from chance-based sports.
Shares of Nazara Technologies and OnMobile Gaming fell as much as 14.2% and 8.9% before paring some losses. Delta Corp slumped 10% to hit its lower circuit.
Nazara and Delta are up 21.6% and 15.9%, respectively, in the year ended Tuesday, while OnMobile declined 11.9%.
(Reporting by Varun Vyas in Bengaluru; Editing by Savio D’Souza and Sonia Cheema