The board of Nazara Technologies consents to raise up to Rs. 750 crore through a stock offering

Digital gaming and esports company Nazara Technologies Ltd said that its board has approved raising of up to Rs 750 crore. In a stock exchange filing, the company said it will raise the funds using a combination of equity shares and equity-linked instruments or securities. This will be the first fundraise activity by the company after its initial public offering (IPO) in March 2021, when it raised Rs 583 crore. After market close, Nazara Technologies had a market capitalisation of Rs 4,806 crore on the BSE.

In its filing, the company said its board has approved “raising of funds by way of issuance of such number of equity shares having face value of Rs 4 each of the company and/or any other equity-linked instruments/securities or any combination thereof, for an aggregate amount not exceeding Rs 750 crore through one or more qualified institutional placements or preferential allotment or through combination thereof or any other permissible mode”.

The company, which is backed by the Rakesh Jhunjhunwala family, has made several investments and acquisitions across various gaming categories including esports, interactive gaming, fantasy sports and multiplayer games, among others. Its investments include companies such as Nodwin, Kiddopia, Sportskeeda, Halaplay and Qunami. As per its latest shareholding pattern, the Jhunjhunwala family holds 9.96% stake in the Mumbai-based company while former chief executive Manish Agarwal holds 1.43% of Nazara Technologies. In May, French investment company Societe Generale picked a stake worth Rs 33.83 crore in Nazara through bulk deals.

In the quarter-ended March 2023, Nazara Technologies reported an 18% year-on-year rise in consolidated net profit at Rs 2.6 crore, while its revenue from operations surged 65% to Rs 289 crore. In May, Nodwin Gaming, a subsidiary of Nazara Technologies, had signed agreements to raise $28 million (around Rs 232 crore) from Nazara, South Korean digital games developer Krafton, Japanese conglomerate Sony Group, Hyderabad-based gaming solutions provider InnoPark India, and digital entertainment and tech company JetSynthesis.

Nazara Technologies shares ended trading at Rs 726.30 on the BSE, up 0.78% from previous close. A report published last week noted that in the backdrop of an overall slowdown in funding activity in the Indian startup ecosystem during the January-June 2023 period, online gaming platforms continued to witness an uptick in investment. While during the first six months of the current calendar year, online gaming companies raised $60 million (around Rs 500 crore), they raised $20 million in the six- month period ended December 2022.

“An increase in the funding activity in terms of value was witnessed, with a three times increase in H1 CY23 (January-June 2023) compared to H2 CY22 (July-December 2022) in funding value. The funding activities in this sector are driven mostly by early-stage funding rounds, which contribute to 73% of the total funding raised by this sector during H1 CY23. Key companies which raised funds include Mayhem Studios and Rooter,” noted.