Ace investor Rakesh Jhunjhunwala-backed Nazara Technologies, an India-based gaming and sports media platform, is all set to launch its three-day initial public offering (IPO) on March 17. The company, popularly known for its games on World Cricket Championship, Chhota Bheem and Motu Patlu series, plans to raises Rs 582 crore from IPO through offer for sale (OFS) of up to 5,294,392 equity shares. The price band for the issue has been fixed at Rs 1,100-01. The bid lot size is of 13 shares and in multiple thereof. The equity shares of Nazara Technologies will be listed on the BSE and the NSE.
Here are key things to know about Nazara Technologies IPO:
Opening and closing date
The initial public offering of Nazara Technologies will open on March 17 and will close on March 19.
The online gaming company has fixed the issue price at Rs 1,100-1,101 apiece.
The IPO comprises of OFS of 49,65,476 equity shares by the promoters and existing shareholders, according to draft red herring prospectus (DRHP) filed with capital markets regulator Sebi. At the upper end of price band of Rs 1,101, the issue will fetch nearly Rs 583 crore to the company.
Investor can make bids for a minimum of 13 equity shares and in multiples of 13 thereafter. That said, minimum Rs 14,300 per lot has to be invested.
The promoters currently hold 22.88 per cent in the company. Post-IPO, the promoter holding will come down to 20.61 per cent. Among major shareholders, Mitter Infotech LLP holds 20.57 per cent stake in the company, followed by Arpit Khandelwal (12.51 per cent) and Rakesh Jhunjhunwala (11.38 per cent), as per the RHP filed on January 14, 2021 with the market regulator Sebi. While Mitter Infotech LLP will be selling 6,91,900 equity shares, Rakesh Jhunjhunwala and Arpit Khandelwal is not participating in the OFS.
Among other investors, IIFL Special Opportunities Fund will sell 12,67,435 equity shares, IIFL Special Opportunities Fund-Series 4 10,36,286 equity shares, IIFL Special Opportunities Fund-Series 5 8,73,989 equity shares, IIFL Special Opportunities Fund-Series 2 8,16,804 equity shares and IIFL Special Opportunities Fund-Series 3 will be selling 3,93,349 equity shares.
Good Game Investment Trust will sell 1,50,000 equity shares, Seedfund 2 International 25,000, Porush Jain 23,725, Azimuth Investments 14,959 and Seedfund 2 India will sell 945 shares.
Brokerage Elara Capital believes the company may command even higher valuations due to high level of gaming growth expected in India. "Nazara may trade at an even higher multiple versus expectations, as it is a pure-play digital company offering potential of 30 per cent CAGR as per our estimates and scarcity premium with almost no traditional company showing capability to grow at this pace in the medium term," it says.
For the financial year 2019-20, Nazara Technologies reported net loss stood at Rs 26.61 crore compared to a profit of Rs 6.71 crore a year ago. Its revenue was at Rs 247.51 crore against Rs 169.70 crore in the same period last year. Even though Nazara is a debt-free company, the company recorded Rs 10.1 crore net loss in H1FY21 compared to Rs 24.9 crore net loss in FY20.
Book running lead managers to issue
ICICI Securities, Nomura Financial Advisory and Securities (India) Private Limited, Jefferies India Private Limited and IIFL Securities are book running lead managers to the issue.