Should You Subscribe to Nazara Technologies IPO?

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Should You Subscribe to Nazara Technologies IPO?

By Aditya Raghunath

Investing.com -- If you are a Rakesh Jhunjhunwala fan/follower, the short answer is, “Yes, you should subscribe to it.” Jhunjhunwala, an investor in Nazara Technologies Ltd (NS: NAZA ), is not selling any portion of his stake in the IPO even as IIFL Fiinance Ltd Class B (NS: IIFL ) (another investor) will offload two-thirds of its 21% stake and the promoters, who own 22.5%, will sell 2.25% of the company. Jhunjhunwala owns 10.8% of the company and is hanging on to it.

Shares are priced at Rs 1,100 – Rs 1,101 per share for the Rs 582.91 crore IPO and represent a 16.7% stake in the company.

Nazara Technologies is India’s leading diversified gaming and sports media platform that also has a presence across emerging and developed global markets like Africa and North America. It has a diversified offering across interactive gaming, eSports, and gamified early learning ecosystems. Its brands include World Cricket Championship (WCC) and CarromClash in mobile games, Kiddopia in gamified early learning, Nodwin and Sportskeeda in eSports and eSports media, and Halaplay and Qunami in skill-based, fantasy and trivia games.

Nazara has recorded revenue of Rs 200 crore in the first half of FY21. However, the company has increased its advertising and promotion spends from 16% in FY19 to 53.7% of revenues in FY20 and to 59.7% in the first half of FY21.

Nazara has booked losses in FY20 on the back of these spends, according to brokerage firm Angel Broking. The firm nevertheless has assigned a ‘subscribe’ rating to the IPO. Brokerage firm BP (LON: BP ) Equities has assigned a ‘subscribe’ rating to the IPO only for its listing gains.

Aditya Birla Money has also assigned a ‘subscribe’ rating to the stock. It said, “The gaming industry is set to grow at over 30 per cent CAGR over 2020-2023E on the back of high mobile growth, rising Internet penetration and increasing number of gamers. Nazara has widespread presence both in terms of geography and product portfolio, which offer strong growth visibility.”

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  • Akhilan Naganathan @Akhilan Naganathan
    whether the premium is justified?
    Like 4
    • Luc Prieur @Luc Prieur
      @Akhilan Naganathan no
      Like 0
    • raaj kumar @raaj kumar
      Good ipo
      Like 0

      • Comment Guidelines

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