Nazara Technologies makes stellar debut, shares list over 80% premium
Shares of Rakesh Jhunjhunwala-backed mobile gaming platform Nazara Technologies Ltd surged more than 80% in their market debut on Tuesday against its issue price of ₹1,101. The stock listed at ₹1,971, registering a huge gain of 79.01 per cent from the issue price on BSE and later jumped 84 per cent to ₹2,026.90. On NSE, it debuted at ₹1,990, a jump of 80.74 per cent. "Nazara is well placed to leverage the opportunity that interactive mobile games, eSports content and gamified early learning apps offer," Motilal Oswal analysts said earlier this month.
Nazara Technologies initial public offer (IPO) was subscribed a whopping 175.46 times earlier this month, driven by high demand from institutional investors. The ₹583-crore initial public offer was in a price range of ₹1,100-1,101 per share. Nazara Technologies IPO, the first IPO in India of a gaming and diversified sports platform, is likely to announce its share allotment status on Wednesday. The company offered 294,392 equity shares of the promoters and existing shareholders through the issue. Mitter Infotech LLP, the promoter of the company, also sold shares in the IPO along with IIFL Special Opportunities Fund, Good Game Investment Trust, IndexArb Securities and Azimuth Investments.
The IPO was subscribed 175.43 times by the end of its last day of subscription. In the IPO, the company reserved shares aggregating up to ₹2 crore for its employees. The company said in a statement it will use the net proceeds from the IPO to achieve the benefits of listing equity shares on the stock exchanges which will thereby provide liquidity to the existing shareholders of the company. The lead managers of the IPO included ICICI Securities, Nomura Financial Advisory and Securities (India) Private Limited, Jefferies India Private Limited and IIFL Securities. The registrar of the IPO was Link Intime India Private Ltd.
Nazara organises e-sports events, including videogame tournaments, which draw thousands of millennial fans, and also offers a variety of free and paid mobile gaming apps for children and adults. The company gets a bulk of its revenue from India and North America but is also present in African and Middle Eastern markets. Revenue jumped 46% year-over-year to ₹2.48 billion in fiscal 2020.
Nazara, however, reported an annual loss of ₹266.2 million compared with a profit of ₹67.1 million a year earlier, hurt by costs related to a string of acquisitions, higher licensing expenses at its e-sports business and more spending on advertising.
(With agency inputs)