Nazara Technologies IPO

Mumbai-based gaming and sports media platform Nazara Technologies is hitting the markets with its Initial Public Offering (IPO) that begins on March 17^th and closes on March 19^th. The Nazara Technologies IPO plans to raise Rs 583 crore through the markets with its offer of 5.29 million equity shares at a face value of Rs 4.

About the Company

Nazara Technologies was founded in 1999 by Nitish Mittersain, an MBA graduate based in Mumbai. With a presence across India, Africa, Latin America, and North America, the company offers interactive games, esports, and gaming-based early learning solutions. Notable the company also holds a majority stake in the popular sports media platform Sportskeeda that it acquired for Rs 44 crore in 2019. The company reported a revenue of Rs 247.5 crore in FY’20 with roughly 41% of it coming from India. The company seeks to build upon the increasing demand for interactive games and e-learning in developing markets in India and Africa and to this purpose offers gaming solutions based on indigenous comic and cultural figures. For instance its offerings in India include the popular characters of Chhota Bheem and Motu Patlu among others. Its other prominent offerings in the gaming segment include the popular mobile-based games World Cricket Championships and CarromClash, the fantasy gaming platform Halaplay, esports platform Nodwin and the multiplayer quizzing app Qunami.  It established a footprint in North America after acquiring Kiddopia, a learning application for kids. As of December 2020, the company had a monthly active user base of over 5.75 crore users, a substantial increase from the 4 crore monthly active users it had at the beginning of the year. Going forward the company seeks to target new and first-time mobile game users by building products customized to their preferences, and applying a subscription-based model to monetize the user base. In addition to launching new, customized gaming offers, the company also plans to grow through strategic acquisitions in key markets. The company however also reported a net loss Rs 10.11 crore for the six month period ending September 2020. The Nazara Technologies IPO signals the next phase in the company’s growth that has so far been driven through scaling up its subscription driven model geared towards local content. It’s promoters include Nitish Mittersain, Vikas Mittersain and Mitter Infotech Pvt Ltd while investor Rakesh Jhunjhunwala holds an 11.51% stake in the company.

What is an IPO

An IPO or Initial Public Offering is a market event in which a company seeks to raise funds from the primary markets by offering a certain portion of its equity for sale. Often an IPO is also accompanied by an OFS or Offer For Sale in which some existing investors in the company seek to exit their positions by offering their stake for sale. An OFS thus simply implies a transfer of ownership whereas an IPO leads to fresh capital infusion in the company.

About the Nazara Technologies IPO

The Nazara Technologies IPO seeks to raise Rs. 583 crore from the markets.  A total of 5.29 million shares are on offer with a price band of Rs 1100-1101. The minimum lot size is 13 shares.  Of the total shares, promoter Mitter Infotech LLP will sell 6,91,900 shares while the remaining will be sold by various investors in in the company through an Offer for Sale (OFS).  An additional 2 crore shares have been reserved for employees who will be offered these at a discount of 10%. The Nazara Technologies IPO is being managed by ICICI Securities, IIFL Holdings Limited, Jeffries India Private Limited, and Nomura Financial Advisory and Securities (India) Private Limited. The Nazara Technologies IPO date has been fixed from March 17^th to March 19^th 2021.

With the Indian economy showing strong signs of recovery after the crippling effect of covid-19, a host of companies have opted to access the markets for fresh capital infusion indicating strong investor sentiment. The Nazara Technolgies IPO is the 14^th IPO to hit the Indian markets in the first three months of 2021, and one among five IPOs scheduled for the week between March 15^th to March 19^th 2021.