Shares of Nazara Technologies, a well-known gaming and sports media platform, faced selling pressure after the Tamil Nadu government passed an ordinance to ban online gaming for stakes. Earlier in the day, the share price had tanked by 4% (Rs. 653.45) before recovering partially to being down by 2.4% (Rs. 663.70) at 11.41am. However, it dipped a bit more to end the day 3.05% down at Rs. 658.70.

Nazara owns some of the most popular esports news and media brands like NODWIN and Sportskeeda, Halaplay, Qunami and OpenPlay inin skill-based, fantasy and trivia games. It is also known for the World Cricket Championship and Kiddopia in Gamified Early Learning.

On September 26, the Tamil Nadu (TN) Cabinet, led by Chief Minister MK Stalin, approved an ordinance to ban online gaming for stakes in the state. According to a government statement, the ordinance will take effect following the governor’s approval. CM Stalin is said to have stated that minors and adults were suffering major losses of their savings and earnings in these online games for stakes.

Meanwhile, recently, Nazara Technologies acquired a 100% stake in WildWorks and along with its IP from existing shareholders in an all-cash transaction for a total of US$10.4 million. “With its strong brand presence and talented Utah-based development team, WildWorks enables us to solidify our leadership position in the gamified learning space for kids,” said Nitish Mittersain, Founder and MD of Nazara Technologies Ltd.

Following the acquisition of WildWorks analysts have raised their earnings estimates for Nazara Technologies. “We increase our sales estimates by 5 percent/10 percent for FY23E/FY24E respectively as we incorporate the acquisition of WildWorks, an interactive edutainment company based out of the US,” said Prabhudas Lilladher. The firm has set a target price of Rs 1,031 for the stock.

In Q1 FY23 over Q1 FY22, Nazara Technologies’ net profit rose 22.2% to Rs 16.50 crore courtesy of a 70% jump in net sales to Rs 223.10 crore on a consolidated basis.