Rakesh Jhunjhunwala-backed Nazara Technologies' IPO of 5.3M shares to open on March 17, fixes price band

Gaming and sports media platform Nazara Technologies said it plans to sell nearly 5.3 million shares in an initial public offering, at a price between Rs Rs 1,100 and Rs 1,101 per share.

At the upper end of the range, the IPO would help raise Rs 582.91 crore in net proceeds. The offer will be opened up to investors on March 17, with the minimum order quantity set at 13 equity shares, and in multiples of 13 thereafter. A single lot will cost investors Rs 14,313 at the upper end of the pricing range.

The Rakesh Jhunjhunwala-backed tech startup has seen a lot of interest from investors in the grey markets, with shares supposedly trading at Rs 1,060 per piece, thanks to its strong balance sheet after it posted a profit of Rs 1 crore in 2018, and Rs 6.7 crore in 2019.

In 2020, Nazara reported a loss of Rs 26 crore. However, the investor interest in the company remains high, fuelled by the recent upswing in the digital media entertainment sector, especially gaming, as people look for things to do whilst confined to their homes.

Nazara said it has bookmarked shares worth nearly Rs 2 crore for its employees, at a discount of Rs 110 apiece.

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All the shares being sold in Nazara's IPO come from its existing shareholders, including IIFL Special Opportunities Funds, Mitter Infotech, Good Game Investment Trust, and others, which means the company will not receive any direct funds from the IPO.

Jhunjhunwala, who owns 10.82 percent stake in Nazara, is not likely to part with his holding as of now.

The Indian gaming industry is at an inflection point, with increasing funding activity on the back of growing international interest in a sector that's demonstrating better room for monetisation, experts have said.

Online gaming has seen significant activity in recent months. With people working from home, social distancing becoming the norm, and limited physical sporting events due to the COVID-19 pandemic, e-sports, and mobile gaming have seen rapid growth.

As per Google-KPMG, India is now the world’s fastest-growing mobile gaming market, growing at 22 percent annually, poised to be worth $1.1 billion by 2021.