Nazara Technologies raises Rs 315 cr for strategic acquisitions, growth initiatives

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Nazara Technologies on Wednesday announced that its board has approved preferential allotment of fresh equity to raise Rs 315.30 crore from marquee institutional investors.

The company will issue 1,429,266 equity shares of face value of Rs. 4/- each at a price of Rs. 2,206/- per equity share (including a premium of Rs.2,202/- per equity share). These shares will be locked in for a period of 1 year from the date of issue.

This infusion of fresh funds will be utilized to invest in growth initiatives of the company as well as pursue strategic acquisitions in the various business verticals of the company including gamified learning, freemium, skill-based real money gaming, and esports as the company continues to expand its “Friends of Nazara” ecosystem.

The “Friends of Nazara” network comprises established gaming companies in which Nazara holds majority stakes and works actively with existing founders and management teams to rapidly achieve scale.

These companies include NODWIN Gaming and Sportskeeda in esports, Next Wave Multimedia (developer of World Cricket Championship (WCC), the largest mobile-based cricket simulation game), Paper Boat Apps (developers of popular gamified early learning app Kiddopia), and Halaplay and OpenPlay in the skill-based real money gaming vertical.

“We are thankful to our investors for their strong endorsement of Nazara’s strategic vision and ability to execute towards its stated goals. The investment from such institutional investors will act as a catalyst for the Nazara flywheel to operate faster across all business segments and will result in compounding of the shareholder value organically and inorganically at the parent as well as at subsidiary levels,” said CEO Nazara Technologies Manish Agarwal.

In August, Nazara acquired a 100% stake in OpenPlay Technologies, which operates Classic Rummy, for Rs 186.4 crore in what was dubbed as one of the largest deals in India’s online gaming industry. This was followed by its independent subsidiary NODWIN Gaming buying the gaming and adjacent IP business of OML Entertainment for Rs 73 crore.

Agarwal, in an interview with ET NOW last month, said, “The company is looking to build value with the help of founders of acquired companies at subsidiary levels. The launch of Jio in India has changed the game for gaming in India. Covid accelerated trends already existing since 2018. India is at a 2, 3, 4 year old story, a very small market yet with large growth expectations. PC to mobile gaming, migration has happened in China – while India directly came on to mobile gaming.”

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He informed that India packs 400 million-plus online gamers and that number is only getting bigger with time. Even millions of dollars flowing into India’s gaming industry, courtesy of China’s shrinking gaming market owing to the recent crackdown, four southern states have taken a strong stance against online gaming.

Highlighting the reasons for the growth of Nazara, he highlighted “Gaming was growing fast and even before COVID, we were growing almost 48-50 percent year on year. The combination of acquisition and growth helped us grow 87 percent and we are continuing to see that growth momentum in different businesses.”