Nazara Technologies, a Mumbai-based gaming and sports media company, has received board approval for a preferential allotment of equity shares to raise Rs 250 crore in funding. This move is part of the company's larger plan, concluding the targeted Rs 750 crore fundraising announced earlier in FY24.
Investors in Focus:
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Leading the investment are Billionaire Nikhil Kamath's Kamath Associates and NKSquared, contributing Rs 50 crore each.
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ICICI Prudential Mutual Fund is investing Rs 75 crore through three schemes, alongside other notable investors such as Plutus Wealth Management, Chartered Finance & Leasing Limited, and ICICI Securities.
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A total of 28,66,474 equity shares will be issued at Rs 872.15 per share.
Nitish Mittersain, Founder & CEO of Nazara Technologies, expressed gratitude for the strong support from investors, stating, "We are immensely grateful for the robust support from our esteemed investors, such as Nikhil Kamath, ICICI Prudential MF, and Plutus Wealth, who have substantially increased their investments in Nazara."
Purpose of Fundraising:
Nazara Technologies plans to utilize the raised capital for funding requirements and growth objectives, including strategic acquisitions and general corporate purposes, according to the company's statement.
Transaction Details:
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Nazara Technologies, as the country's first publicly listed gaming company, is proposing to issue 28.66 lakh shares at an issue price of Rs 872.15 per share.
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As of January 17, the company was trading at Rs 936.75 on the National Stock Exchange.
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Significant investments from Nikhil Kamath's firms and ICICI Prudential Mutual Fund will result in increased stakes for the respective investors.
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Nazara Technologies' consolidated cash reserves now exceed Rs 1,500 crores, positioning the company well for both organic growth and strategic acquisitions. Nikhil Kamath's firms, Kamath Associates and NKSquared will invest Rs 50 crore each, increasing their combined stake from 2.53 per cent to 3.93 per cent.
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Plutus Wealth will invest Rs 50 crore, raising its stake from 6.14 per cent to 6.63 per cent.
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ICICI Prudential Mutual Fund will invest Rs 75 crore through its schemes, increasing its combined stake from 1.75 per cent to 2.81 per cent.
Previous Investment by Nikhil Kamath:
In September 2023, Kamath Associates & NKSquared, managed by Zerodha's founders Nikhil and Nithin Kamath, invested Rs 100 crore in Nazara Tech, raising their stake.
The current investment further increases Kamath firm's stake to 3.93%, with Plutus Wealth's stake also rising to 6.63%.
Acquisition of Kofluence:
Following the recent acquisition of a 10.77% stake in influencer marketing platform Kofluence, Nazara Technologies aims to capitalize on India's growing gaming market.
The company plans to issue 3.71 lakh shares for Rs 872.15 per share, amounting to Rs 32.41 crore.
The acquisition is aligned with Nazara's strategy to enhance game visibility, enable targeted marketing, and leverage influencer collaboration for market penetration.
Financial Performance:
Nazara's recent financial performance indicates promising results, with a 16.83% growth in revenue and a 7.86% increase in profits in Q3 FY24.
The company boasts over Rs 1500 crore in consolidated cash reserves.
Nazara Technologies currently operates in three key sectors: gaming (World Cricket Championship, Kiddopia, Animal Jam, Classic Rummy, etc.), esports (Nodwin Gaming, Sportskeeda), and advertising (Datawrkz).
The company not only focuses on gaming studios but also plans to explore opportunities in gaming-focused ad-tech companies, programmatic ad-tech firms, and media buying or planning agencies to expand its presence in developed markets.
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