Rakesh Jhunjhunwala-backed Nazara Technologies share was trading at a 50-59 percent premium in the grey market ahead of its listing on March 30.
The initial public offering of the mobile gaming company got a good response, as the Rs 583-crore offer was subscribed 175.46 times, the second-highest for 2021 after MTAR Technologies that was subscribed 200.79 times.
Qualified institutional buyers and non-institutional investors remained at the forefront, as they had put in bids 103.77 times and 389.89 times more than their reserved portion. The portion set aside for retail investors was subscribed 75.29 times and that of employees 7.55 times.
Nazara shares was trading at a premium of 50-59 percent, or Rs 550-650, in the grey market, over and above the issue price of Rs 1,101 a share, data available on IPO Watch, IPO Guru and IPO Central showed.
The grey market is an unofficial trading platform where shares get traded well before the allotment in the IPO and listed on bourses.
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A few days back the premium was Rs 750 but even the present figure is a significant one, experts say.
"The IPO has attracted a great deal of investors’ attention as this is a technology company mainly operating in the mobile games area. Also, it is backed by Rakesh Jhunjhunwala which seems to have provided it some creditability," Gaurav Garg, Head of Research at CapitalVia Global Research told Moneycontrol.
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Nazara Technologies mopped up Rs 583 crore through the IPO. It was a complete offer for sale issue, so the company will not receive funds from the IPO.
Nazara Technologies is the leading India-based diversified gaming and sports media platform with presence in India and across emerging and developed global markets such as Africa and North America. It offers the interactive gaming platform, eSports and gamified early learning systems including World Cricket Championship (WCC) and CarromClash in mobile games, Kiddopia in gamified early learning, Nodwin and Sportskeeda in eSports and eSports media, Halaplay and Qunami in skill-based, fantasy and trivia games.
After posting a loss of 1.4 percent in FY19, the company has reported strong revenue growth of 45.9 percent in FY20 to Rs 247.5 crore. The company has posted a revenue of Rs 200 crore in the first half of FY21. It has been reporting losses as it increased spending on advertising and promotion from FY20 onwards, which Angel Broking says will help drive strong topline growth for the company.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.