From E-Games To Market Games: Junjhunwala-backed Nazara Tech Opens IPO On March 17

It is going to be an eventful week as Dalal Street as the domestic equity market turns volatile with 6 primary market offerings hitting the street. These include the likes of Craftsman Automations, Anupam Rasayan, Laxmi Organics, Kalyan Jewellers, and Suryoday Small Finance Bank. In the grey market, unlisted shares for all 5 have been plunging. But the latest of all, Nazara Technologies, has emerged a promising candidate on the grey market with an IPO of about Rs.850 per share. Hence, all the enthusiasm for the Nazara Technologies IPO date tomorrow.

What is Nazara Technologies?

Nazara Technologies is a leading Indian sports and diversified gaming media brand with a reach across North America and Africa as well. The most recognizable products of this 1999-founded company are their World Cricket Championship, Motu Patlu, and Chhota Bheem games.

Nazara Tech has offerings such as eSports and gamified early learning ecosystems and interactive games. This includes Kiddopia in gamified early learning, CarromClash and World Cricket Championship (WCC) in mobile games, Halaplay and Qunami in skill-based, fantasy and trivia games, and Sportskeeda and Nodwin in e-sports media and e-sports.

The lead managers to this issue are IIFL Securities, ICICI Securities, Nomura Financial Advisory and Securities India, and Jefferies India.

The IPO

The Nazara Technologies IPO date is March 17th. The  Rs.583 crore Nazara IPO of 52,94,392 shares will be closed on March 19. Meanwhile, the anchor book, if at all, is open for a one-day bidding today i.e. March 16, 2021. The price band for this IPO is fixed at Rs 1,100-1,101.

The IPO is an entire sale offer by existing shareholders, so the company itself is not going to earn any money from the IPO. While IIFL Special Opportunities Fund is putting up 12,67,435 equity shares, here are the rest of the sale details:

• 10,36,286 equity shares by IIFL Special Opportunities Fund-Series 4
• 8,73,989 equity shares by IIFL Special Opportunities Fund-Series 5
• 8,16,804 equity shares by IIFL Special Opportunities Fund-Series 2
• 6,91,900 equity shares by Mitter Infotech LLP
• 3,93,349 equity shares by IIFL Special Opportunities Fund-Series 3
• 1,50,000 equity shares by Good Game Investment Trust
• 25,000 equity shares by Seedfund 2 International
• 23,725 by equity shares  Porush Jain
• 14,959 equity shares by Azimuth Investments
• 945 shares by Seedfund 2 India

The offer also includes shares worth Rs.2 crores for Nazara Tech’s employees. Employees eligible for ESOPs will be offered shares at a per share discount amounting to Rs.110.

You can place a bid for at least13 shares and thereafter in multiples of 13. Basically, you can bid for a minimum of Rs.14,313 in a single lot at a higher price band.

A record-setting IPO?

IPO watchers have been readily touting Nazara Tech as the clear winner of the IPO fest that this week is turning out to be. In the unauthorized market, dealers are putting all bets on the Big Bull, while market sentiment has also turned bullish on this IPO. Some market watchers have even projected that the Nazara IPO will set new subscription records. These certainly can’t be denied instantly, as investor enthusiasm is at its peak in the primary market, with liquidity at a high as well.

Another factor that Nazara Tech has got going for itself is the association with Rakesh Jhunjhunwala. His name itself can easily be expected to draw investors. Plus, the company is already active in niche business segments along with high growth forecasts. As of 30th September, Jhunjhunwala held a 11.51% stake or 3,294,310 shares. But he is not planning to sell any in this issue.

The possibility of a fund squeeze with another five IPOs in the same week cannot be ruled out, but some experts are refusing to consider it, claiming sound fundamentals, strong backing, and new business models turning the investment heat up on Dalal Street. Investors have been known to be pretty upbeat about the IPO, having earned good returns from their investments in this much-awaited IPO.

Final thoughts

As per a statement given by the company, the proceeds from the Nazara IPO will be utilized to achieve the advantages of listing equity shares on stock exchanges and therefore provide some liquidity to existing shareholders. With big bets being placed already, it would be exciting to watch the developments in the market in the next 3 days. Not just that, investors could do with keeping a close eye on Nazara Technologies in the near future as well, the company being one to reckon with.