Shares of Nazara Technologies Limited opened its trading hour at Rs 592.10 and currently trades at Rs 608, zooming nearly 5 percent as compared to the previous closing price of Rs 580.95. In the last one-month period, the stock has gained around 19 percent ranging from Rs 512.20 to the current price levels.
One of the prime factors causing the stock prices to surge is after the company, through a regulatory filing with the BSE, gave an update pertaining to Nodwin Gaming Private Limited, its material subsidiary company.
The filing mentioned about Nodwin raising Rs 197.20 crores via private placements at a pre-money valuation of Rs 2,624 crores. Moreover, it plans to do a secondary sale of shares by its founding shareholders to Nazara amounting to Rs 34.76 crores summing up to an aggregate amount of around Rs 232 crores.
Ace investor Ms. Rekha Jhunjhunwala holds a 9.96 percent stake in the company equating to 65,88,620 shares. The holding value of the same sums up to approximately Rs 401 crores.
Nazara Technologies Limited is a mobile game company based in India with segments including Freemium, Telco subscription, etc. It generates a majority of its revenue from the ‘eSports’ segment. Geographically, it derives most revenue from the Asia-Pacific region.
Having a quick look at the latest quarterly financials of the company, the operating revenues as well as net profits have declined with the former reducing from Rs 315 crores in Q3 to Rs 289 crores in Q4 and the latter moving down from Rs 20 crores to Rs 12 crores during the same period indicating a downfall of 40 percent.
On a YoY basis, the operating revenues and net profits have shown a contrasting movement with an increase in operating revenues from Rs 622 crores during FY21-22 to Rs 1,091 crores in FY22-23 representing an increase of around 75 percent. Net profits rose from Rs 51 crores to Rs 63 crores keeping the timeframe the same.
The company has been successful in improving the profitability ratios with the return on equity (ROE) moving from 2.42 percent during FY20-21 to 6.05 percent in FY21-22. Moreover, the return on capital employed (ROCE) took a shift from 3.02 percent to 8.37 percent during the same time horizon.
According to the latest data available for the March 2023 quarter, promoters hold a 19.05 percent stake, and Foreign Institutional Investors hold a 8.58 percent stake in the company.
Written by Amit Madnani
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