Rakesh Jhunjhunwala backed Nazara Technologies IPO of Rs 583-crore iopened on March 17. The Nazara Technologies IPO is entirely an offer for sale comprising up to 1,267,435 equity shares by IIFL Special Opportunities Fund, up to 1,036,286 equity shares by IIFL Special Opportunities Fund – Series 4, up to 873,989 equity shares by IIFL Special Opportunities Fund – Series 5, up to 816,804 equity shares by IIFL Special Opportunities Fund – Series 2, up to 691,900 equity shares by Mitter Infotech LLP, up to 393,349 equity shares by IIFL Special Opportunities Fund – Series 3, up to 150,000 equity shares by Good Game Investment Trust, up to 25,000 equity shares by Seedfund 2 International, up to 23,725 equity shares by Porush Jain, up to 14,959 equity shares by Azimuth Investments Limited and up to 945 equity shares by Seedfund 2 India
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Nazara Technologies IPO Details:
Updates & Indicative Time Table:
- ANCHOR ISSUE: IPO bound Nazara Technologies raised ₹262 crore from 24 anchor investors .Anchor investors include 16 foreign investors and 8 mutual funds.Foreign investors were GIC, ADIA, Aberdeen, Fidelity, Templeton AM, Nomura AM, Goldman Sachs AM, Orchid Asia, Steadview, White oak, Eastspring, Jupiter AM, Ashmore, Mentor capital, Cohesion MK, and Elara. The mutual funds, SBI MF, HDFC MF, ICICI Prudential MF, Birla MF, Nippon MF, Axis MF, Kotak MF, and Sundaram MF participated in the issue.
About Nazara Technologies
- Nazara Technologies Ltd is a leading mobile game company in India.
- The company offers a range of diversified gaming products and the operations of the company are broadly in five segments, i.e.
- Gamified Early Learning
- eSports
- Telco Subscription
- Freemium and
- Realmoney Gaming.
- Currently majority of the revenue of the company comes from subscription fees paid by its users for accessing gamified early learning content as well as from eSports business.
- It is also one of the leading live eSports streaming and on-demand eSports media content providers in India.
- Its offerings include Carrom Clash and World Cricket Championships in mobile gaming, Kiddopia in gamified early learning, Nodwin and Sportskeeda in eSports, and Halaplay and Qunami. are some of its offerings.
- The company focuses on mass mobile internet users comprising mainly first-time mobile gamers.
- The company derives maximum revenue from subscription fees charged from customers under the gamified early learning and eSports business segments.
Nazara Technologies IPO: Financials
Pros
- Leadership position in a diversified and scalable business;
- Portfolio of premium intellectual property and content across regions and businesses;
- Large and engaged community of users, with attractive monetization opportunities
- Successful inorganic growth through strategic acquisitions;\
- Profitable platform model benefitting from India growth story with limited regulatory risk;
- Strong leadership team backed by marquee investor.
Cons
- Big players like PayTM, Reliance Jio could enter this area. .
- Nazara Technologies operates under a highly competitive sector.
Nazara Technologies IPO: Assessment
- This is Nazara Technologies second attempt at IPO. In 2018, it allowed the SEBI approval to lapse.
- In Feb 2021, Nazara alloted shares at Rs. 862 for Rs. 100 cr. to financial investor Instant Growth (Hornbill). Now tghe shares are being offered tgo public at more than 25% premium.
- Management is confident that gaming industry could see exponential growth globally.
- COVID 19 has given further tailwinds to the gaming industry worldwide.
- To establish footprint in eSports, the company has done acquisition of Nodwin Gaming in FY 2018, which, amongst the few companies that are active for eSports in India.
- There are no comparable peers with similar line of business
- Nazara Technologies has leadership position in a diversified gaming and sports media platform with a global presence. The company has first mover advantage.
- Nazara Technologies has taken to inorganic growth to fortify its position.
- Nazara Technologies IPO was last reported to be commanding a GMP of Rs. 950.
- Nazara Technologies Anchor list has been quite good.
- Easy Trip IPO is demanding a P/E multiple of 58.6x based on FY20 EPS of Rs. 3.2.
- I intend to apply in Nazara Technologies IPO. The Nazara Technologies IPO looks quite good for listing gains as well as there after portfolio.
- A small IPO size with only 10% for retail would translate to very heavy subscription and low chances of allotment.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.