All eyes on Nazara Tech IPO

Among the much-awaited initial public offerings this month has been Nazara Technologies’ Rs 583-crore IPO. The Nazara Technologies IPO date for the opening of subscription is March 17; the closing date is March 19. The price band for the issue is fixed at Rs 1100-1101.

Nazara Technologies IPO is the first pure-play gaming company in India to be listed. This is the company’s second go at an IPO; it had filed a DRHP (draft red herring prospectus) earlier in 2018 but had halted its plans as it felt the market condition was not favourable. During the pandemic-induced lockdown, there was a surge in mobile gaming and that egged on the firm to go the IPO way. A Nielsen report has shown that Indians spend 218 minutes gaming in comparison with the 151 minutes before the lockdown. Reports also suggest that the first nine months of a pandemic-ridden 2020 saw India take the top spot in mobile game downloads (7.3 billion installs) globally.

Naza’s monthly active users stood at an average of four crore in fiscal 2020 while in the first nine months of 2020 till December 2020, it stood at 5.75 crore.

One of the biggest shareholders of the company, Rakesh Jhunjunwala, has decided to stay put and not sell any shares through this issue. He owns nearly 11.5 per cent stake in the firm as of September 30, according to the DRHP.

What else to look for

Now that you know that the Nazara Technologies IPO date is March 17, you should turn your gaze towards the other aspects of the IPO.

• The company’s objective to launch the IPO is to use the proceeds to benefit from listing its equity shares on the stock exchange and boost its brand presence and name. This, according to the company, will offer liquidity to its already existing shareholders.
• Promoters and investors of the company are offering 5.29 million shares, ie, 16.7 per cent stake through OFS or offer for sale. This OFS will help bring in Rs 582.91 crore at the Nazara Technologies IPO’s upper band.
• The bid lot is 13 equity shares and in multiples of the same from there on. The discount for eligible employees will be Rs 110 per share. The allocation for eligible employees to purchase shares is Rs 20 million.
• The face value is Rs 4 per equity share. The minimum bidding at the base price for investors is Rs 14,300 worth of shares.
• IIFL will sell 14 per cent stake in the company out of its total holding of more than 21 per cent. The promoters of the company, who own more than 22.5 per cent stake will sell a 2.25 per cent stake in the company.
• The company has set apart 75 per cent of the Nazara Technologies IPOfor qualified institutional buyers (QIBs), 15 per cent for non-institutional investors and 10 per cent for retail investors.
• ICICI Securities, Jeffries India, Nomura Financial Advisory and Securities and IIF Securities are the book running lead managers.

Nazara Technologies: What you need to know

Now that you know all about Nazara Technologies IPO date and other details of the initial offering, it is time to take a deeper dive into the company and its growth.

The company was incorporated in 1999 and is a leading name in the mobile gaming world. It is also a sports media platform and is known for sports simulation and eSports, its acquisition Sportskeeda being a key one. It holds a market-first position in the country. It is known for its games such as Chhota Bheema, Motu Patlu and World Cricket Championship (WCC). It owns a majority stake in the WCC and CarromClash in mobile games. It also has stakes in Kiddopia in gamified early learning.

Acquisitions

In January 2021, Nazara’s early investor, WestBridge Avenues, had exited the company and received 40 times it had invested. Nazara has acquired Halaplay, a fantasy gaming platform for Rs 40 crore and Sports Unity, creator of a multiplayer quiz called Qunami at Rs 7.5 crore. Apart from Sportskeeda that it acquired for Rs 44 crore, its other big acquisition was Paper Boat Apps, a Mumbai-based indie studio for Rs 83.5 crore.

Apart from India, it has a presence in global markets like North American and Africa. Nazara owns 55 per cent interest in Nodwin Gaming, which recently raised Rs 164 crore from PUBG game owner Krafton. The valuation of Nodwin is in the Rs 1100 crore range, following the investment.

Nazara Technologies has over Rs 400 crore in cash. Its investment in Indian gaming over the past five years is to the tune of Rs 300 crore. The company’s vertical, Gamified learning, fetches 39 per cent of its revenues while e-sports brings in 32 per cent.

If you want to apply for Nazara Technologies IPO, among others coming up soon, you could do so with an Angel One Demat account. You can open an account in minutes on the Angel One website.