MUMBAI: Mobile gaming company Nazara Technologies opened its Rs 5.83 billion initial public offering on Wednesday. The IPO, the first from an Indian company in the pure play gaming business, has received an enthusiastic ‘subscribe’ rating from analysts.
An elated Nitish Mittersain, CEO & founder of Nazara, tweeted: “Finally, the #Nazara IPO has launched today as the first gaming #IPO of India after being in the works for 21 years! I want to thank everyone for all the support over the years and seek your good wishes and blessings for a new beginning!”
The public issue is through an offer for sale (OFS) of equity shares up to 52,94,392 equity shares with a face value of Rs 4 per share, aggregating to Rs 582 – Rs 5.83 billion (at the lower and upper price band). Nazara Technologies has reserved shares aggregating up to Rs 20 million for eligible employees, who would get a discount of up to Rs 110 per share.
The Nazara Technologies offer includes an OFS of up to 691,900 equity shares by the promoters, 4,387,863 equity shares by the investor selling shareholders, and 214,629 equity shares by the other selling shareholders. Nazara Technologies has fixed the price band of Rs 1100 – Rs 1101 per share. Since this is an OFS, Nazara will not receive any proceeds from the Offer and all such proceeds (net) will go to selling shareholders.
Many marquee global investors such as Goldman Sachs India, Government of Singapore, Fidelity Funds, Nomura, Abu Dhabi Investment Authority, Aberdeen Standard Asia Focus, Steadview Capital Mauritius, Eastspring Investments, Hornbill Orchid India Fund and Cohesion MK Best invested in the company.
Moneycontrol reports that experts anticipate double-digit growth for the gaming industry, going ahead. The company has strong geographical presence and product portfolio and is expected to see steady growth in margin and return ratios.
Further, Nazara Technologies plans to expand into Spanish, French, and German speaking regions by developing quality and relatable content in the gamified early learning space, zeebiz.com reports. eSports, the second largest revenue contributor to revenue, has largescale IPs, media rights, publisher and brand partnerships, and on-demand premium e-Sports content.
EBITDA margin of the company turned positive to 3.0% in the first half of FY21 from negative 2.2% FY2020. Strong retention rates with strong unit economics, increasing contribution of media rights to esports revenue and higher revenue contribution of freemium products would help to enhance its profitability in the coming years.
Indian gaming industry opportunity:
The Indian gaming industry is projected to grow over 31.7% yoy due to growth of digital infrastructure and significant rise in quality and engaging of gaming content.
By 2024, the gaming industry in India is set to be valued at $3.544 billion. India’s online gaming industry has already attracted over $ 350 million in investments from venture capital firms between 2014 and 2020 (Federation of Indian Chambers of Commerce & Industry and India Brand Equity Foundation).
