Nikhil Kamath’s gaming stock draws market attention by raising Rs.900 crore through preferential issues and increasing its stake to 91 percent in Absolute Sports (Sportskeeda), a prominent sports and entertainment platform.
Price Movement
In Thursday’s trading session, Nazara Technology Ltd’s shares opened at a 52-week high of Rs.1,124.15 per share, marking a 3.5 percent increase from the previous close of Rs.1,086.65 apiece. However, the stock later pulled back and is now trading at Rs.1,009.5, down 7 percent from its earlier closing price.
What is the news
Nazara Technologies Limited a leading diversified gaming and sports media company in India, has announced its largest-ever fundraise to accelerate its growth. The company’s board has approved a preferential equity issue to raise Rs.900 crore, pending shareholder and regulatory approvals. This funding will support strategic acquisitions, business expansion, and new growth opportunities.
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The Rs.900 crore equity issue will be funded by notable investors such as SBI Mutual Fund, Junomoneta Finsol, Think Investments, Discovery Investments, Mithun and Siddharth Sacheti, Cohesion Investments, Chartered Finance and Leasing, Ratnabali Investments, and Aamara Capital.
This will bolster Nazara’s financial strength for long-term growth, with shares adhering to SEBI regulations and lock-in requirements.
Additionally, Nazara has acquired a further 19.35 percent stake in Absolute Sports Pvt. Ltd., the parent company of Sportskeeda, for Rs.145.5 crore. The payment was split between cash and stock, bringing Nazara’s total ownership in Absolute Sports to 91 percent.
Sportskeeda, the flagship brand of Absolute Sports, engages millions of sports fans worldwide each month, enjoying strong popularity in India and the U.S., where it is ranked among the top sports platforms.
Recently, Absolute Sports has broadened its portfolio by acquiring Pro Football Network (PFN), SoapCentral, and Deltia’s Gaming, enhancing its presence in sports and entertainment.
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Management Commentary
Commenting on the development, Nitish Mittersain, CEO of Nazara Technologies, said “Nazara has demonstrated its ability to attract top-tier investors who believe in our long-term vision of establishing India’s first globally respected gaming powerhouse. This Rs,900 crore fundraising will be instrumental in accelerating our growth across key segments.
Additionally, increasing our stake to 91 percent in Absolute Sports (Sportskeeda) reinforces our leadership in the sports media landscape.”
Shareholding Pattern
As per the June 2024 shareholding pattern, the promoters of Nazara Technologies Limited hold a 10.05 percent stake, while Foreign Institutional Investors hold a 6.05 percent stake.
Domestic Institutional Investors and Retail investors hold a stake of 16.76 percent and 67.13 percent, respectively in the company. Nikhil Kamath owns a 1.97 percent stake in Nazara Technologies Ltd.
Financials
For the quarter ended June 2024, Nazara Technologies Limited reported a net profit of Rs.24 crore, up 14.3 percent from Rs.21 crore in Q1 FY24. Revenue from operations was Rs.250 crore, a slight decline of 1.6 percent from Rs.254 crore in the same period.
About the company
Nazara Technologies is India’s only listed gaming and esports company, with majority ownership of several leading gaming and esports brands with a presence in India, the US, and other global markets.
Written by – Siddesh S Raskar
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