Nazara Technologies Limited, a leading gaming and sports media platform in India, has announced that it has raised Rs 100 crore from Kamath Associates and NKSquared, entities owned by Nikhil Kamath, the co-founder and CIO of Zerodha, India’s largest stockbroker.
A strategic investment to boost Nazara’s growth
Nazara Technologies is proposing to issue 14,00,560 equity shares of face value of Rs 4 each at a price of Rs 714 per equity share aggregating to Rs 999,999,840 (Issue) proportionately to Kamath Associates and NKSquared. The issue is subject to the approval of the shareholders of the company.
The company said that the fresh funds will be utilized to invest in funding requirements and growth objectives of the firm, which will include making strategic acquisitions and investments in various companies/ body corporates/ entities, meeting growth and funding requirements based on the business opportunities across the subsidiaries/ associates/ joint venture of the company, as applicable, through investment in subsidiaries/ associates/ joint venture of the company.
“Nikhil Kamath symbolizes success in India’s tech arena, and this fund raise holds immense value for us at Nazara as we continue to build a diversified gaming platform in India. Beyond the funds raised, his investment stands as a resounding vote of confidence in Nazara,” said Nitish Mittersain, CEO of Nazara Technologies.
A diversified gaming platform with strong financials
Nazara Technologies is one of the leading gaming and sports media platforms in India with a presence in over 60 countries across emerging markets. The company offers a variety of gaming products across segments such as esports, casual games, gamified learning, fantasy sports and telco subscription.
The company has a portfolio of popular gaming brands such as World Cricket Championship (WCC), CarromClash, Kiddopia, Sportskeeda, Nodwin Gaming and Halaplay. The company also has strategic investments in regional gaming platforms such as Paper Boat Apps (India), Hashcube (India), Mastermind Sports (UK), Moonglabs (India) and Bakbuck (India).
Nazara Technologies reported a consolidated revenue of Rs 454.2 crore for the financial year ended March 31, 2021, up by 84% from Rs 247.5 crore in the previous year. The company also turned profitable with a net profit of Rs 13.6 crore for FY21, compared to a net loss of Rs 26.6 crore in FY20.
The company went public in March this year and became the first Indian gaming company to list on the stock exchanges. The IPO was oversubscribed by 175.46 times and received a strong response from investors across categories. The shares were listed at a premium of 79% over the issue price of Rs 1,101 per share.
A bullish outlook on the Indian gaming industry
The Indian gaming industry is expected to grow at a compound annual growth rate (CAGR) of 27% from $1.8 billion in 2020 to $6 billion by 2025, according to a report by Maple Capital Advisors. The growth is driven by factors such as increasing smartphone penetration, affordable data plans, rising disposable income, young demographic profile and growing digital literacy.
The report also highlighted that India has over 400 million gamers, out of which 365 million are mobile gamers. The mobile gaming segment accounts for 85% of the total gaming revenue in India and is projected to grow at a CAGR of 40% from $1.2 billion in 2020 to $4.4 billion by 2025.
The report also noted that India has emerged as a global hub for game development with over 300 game development studios and over 25,000 game developers. The report also stated that India has witnessed a surge in investments and acquisitions in the gaming sector with over $544 million invested across 62 deals in the last five years.
Nikhil Kamath, who is also an avid gamer himself, said that he believes that gaming is one of the fastest growing sectors in India and has immense potential to create value for all stakeholders. He said that he is impressed by Nazara’s vision and execution capabilities and is looking forward to being a part of their growth journey.
