Nazara Technologies on September 18 announced that it has received board approval to raise Rs 900 crore from a clutch of new and existing investors to fund its acquisition spree and global expansion as the diversified gaming and sports media firm looks to scale up its portfolio of businesses.
The preferential equity issue saw participation from investors such as SBI Mutual Fund, CaratLane co-founder Mithun Sacheti with brother Siddharth Sacheti, and Plutus Wealth associate Junomoneta Finsol.
Other investors include Think Investments, Discovery Investments, Cohesion Investments, Chartered Finance and Leasing, Ratnabali Investments and Aamara Capital.
“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 crores fundraise will be instrumental in accelerating our growth across key segments" Nazara Technologies founder Nitish Mittersain said in a statement.
Through this transaction, Nazara Technologies is proposing to issue 94.31 lakh shares (94,31,294 shares) at an issue price of Rs 954.27 per share. The company's shares were trading at Rs 940.8 on the National Stock Exchange at the day's close on September 18.
Second fundraise within a year
This is the second fundraise for Nazara Technologies within a year, following the Rs 760 crore raised from marquee investors such as Zerodha co-founder Nikhil Kamath, ICICI Prudential MF, and SBI Mutual Fund in recent months..
The company had also raised Rs 315 crore from a clutch of institutional investors including Singapore sovereign wealth fund GIC-managed investment firm Gamnat Pte and Ahmedabad-based Plutus Wealth Management in October 2021. Nazara Technologies went public in February 2021.
Prior to this fundraise, Nazara had a cash balance of Rs 1,450 crore, which the country's first publicly-listed firm has been using for new acquisitions, investments, and consolidating its positions in existing subsidiaries such as Paper Boat Apps and Nextwave Multimedia.
Last week, Nazara Technologies made its largest bet to date, by announcing an investment of Rs 982 crore into Moonshine Technology, the parent firm of online poker platform PokerBaazi.
This includes picking up 47.7 percent stake for Rs 832 crore in a secondary transaction, of which Rs 592.26 crore will be paid by the company through cash and the balance Rs 239.25 crore will be paid through a share swap, representing a 3.17 percent stake in the company.
Nazara will also pump an additional Rs 150 crore in primary capital into Moonshine Technology through compulsory convertible preference shares at a future date. This transaction will provide the company a majority stake in Moonshine Technology.
Last month, Nazara Technologies also acquired UK-based gaming studio Fusebox Games for Rs 228 crore ($27.2 million) in an all-cash deal.
These deals were part of Nazara's push to boost its gaming business, which Mittersain believes would be the biggest revenue generator for the company in the coming years.
In March, it earmarked a $100-million war chest for global expansion over the next 24 months.
Nazara Technologies, which is one of the country's oldest gaming firms, currently operates in three key sectors - gaming (World Cricket Championship, Kiddopia, Animal Jam, Classic Rummy etc), esports (Nodwin Gaming, Sportskeeda) and advertising (Datawrkz). It also announced a game publishing unit last year.
In a recent interview to Moneycontrol, Mittersain had said that they are eyeing a 10-fold growth in revenue in the next five years.
Hiking stake in Sportskeeda parent
Apart from the fundraise, Nazara is also buying an additional 19.35 percent stake in its subsidiary Absolute Sports, which operates sports media brands Sportskeeda and Pro Football Network, from its existing shareholders - Porush Jain and Srinivas Cuddapah - for Rs 145.5 crore.
The amount will be payable partly by way of cash consideration of Rs 72.73 crore and the balance of Rs 72.73 crore by way of a share swap. With this, Nazara now holds a 91% ownership stake in Absolute Sports.
"The growth of Absolute Sports, from its early days as a startup to becoming a global media player, underscores our commitment to supporting innovative teams that consistently deliver transformational growth" Mittersain said in a statement.
Nazara Technologies also hiked its stake in Kiddopia parent Paperboat Apps to 100 percent, by picking up the remaining 48.42 percent stake for Rs 300 crore in July.
It also picked up a 100 percent stake in mobile gaming subsidiary Nextwave Multimedia by buying the remaining 28.12 percent from founder shareholders PR Rajendran, R Kalpana and PR Jayashree in May.
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