Nazara Technologies secures Rs 495 Cr funding from Mithun Sacheti & Arpit Khandelwal-led entity; open offer launched

Through this transaction, Axana Estates will acquire about 5.4 percent stake in Nazara Technologies through a preferential issue of equity shares at a price of Rs 990 per share. Apart from Khandelwal and Sacheti, Axana Estates LLP also counts Siddhartha Sacheti (Mithun Sacheti's brother) and Yash Sacheti (Siddhartha Sacheti's son) as designated partners.

The company said that Axana Estates, Plutus Wealth Management, and Junomoneta Finsol (an associate firm of Plutus Wealth) are launching a public open offer to acquire an additional 26 percent stake in Nazara at Rs 990 per share for a total consideration of Rs 2,382.35 crore (Rs 23,82,34,79,790). At 1.33pm, the stock was trading at Rs 1,061.05 on the National Stock Exchange, up 3.78 percent from the previous close.

Plutus Wealth, which first invested in Nazara Technologies in January 2021 before its public market debut, currently holds 11.54 percent stake while Junomoneta Finsol owns 1.7 percent. Separately, Khandelwal and the Sacheti brothers together hold a 9.67 percent stake in the company. As a result of this transaction, these firms will become promoters of the company along with the current promoters and promoter group.

Nazara Technologies stated that it will continue to operate independently under Chairman and Managing Director Vikash Mittersain along with joint managing director and chief executive Nitish Mittersain.

If the open offer is fully accepted, the total shareholding of the acquirers along with existing promoters and promoter group is expected to be around 61.5 percent of the firm.

"Nazara is set for global growth, and we are excited to partner with Arpit & Mithun, who share our vision. Their belief in our potential and expertise will help us scale new heights, positioning Nazara as a unique global gaming company from India" Mittersain said in a statement.

Nazara stated that this partnership brings together complementary expertise and resources, enabling the company to access new markets, leverage cutting-edge technologies, and improve operational efficiencies.

“We are excited to deepen our investment in Nazara, a company with a proven track record of capitalizing on global gaming trends. This consolidation of ownership will provide growth capital and bring strategic expertise to support Nazara, its promoters & team in the journey of becoming a world-leading gaming and entertainment brand” Khandelwal said in a statement.

Sacheti stated "Gaming is the new consumer play, blending entertainment, technology, and community to create unmatched engagement. It has become a powerful platform to connect with audiences and shape consumer behaviour in real time."

"We are thrilled to partner with Nazara to unlock its immense potential and drive global growth and look forward to unlocking the Company’s full potential in collaboration with its exceptional management team" he said.

Nazara's acquisition spree

Nazara Technologies said the investment will be used towards accelerating its organic growth, making strategic acquisitions, and expansion into new markets.

Nazara Technologies, one of the country's oldest gaming firms, has been aggressively pursuing acquisitions to scale and expand its portfolio of businesses. The company operates across a range of sectors such as gaming (World Cricket Championship, Kiddopia, Animal Jam, Classic Rummy etc), e-sports (Nodwin Gaming, Sportskeeda), advertising (Datawrkz) and physical entertainment (Funky Monkeys).

On January 20, Nazara Technologies announced that it is buying intellectual property (IP) rights of two mobile gaming titles - CATS: Crash Arena and King of Thieves - from Barcelona-based game developer and publisher ZeptoLab for Rs 66.6 crore ($7.7 million) in an all-cash deal. The two games reported $6.1 million in revenues in the calendar year 2024.

Through this acquisition, Nazara will own the game IPs and will also publish the games under the “Nazara Publishing” banner, it said.

In September, Nazara made its largest bet to date by announcing an investment of Rs 982 crore in Moonshine Technology, the parent firm of online poker platform PokerBaazi.

The firm also acquired UK-based gaming studio Fusebox Games for Rs 228 crore in an all-cash deal and purchased a 15.86 percent stake in esports community platform Stan for Rs 18.4 crore in cash through a secondary transaction from existing shareholders.

Nazara is also buying remaining stakes in its subsidiaries Paper Boat Apps, which owns the gamified learning app Kiddopia, and Nextwave Multimedia, a mobile-gaming studio, to take 100 percent ownership.

These deals are part of the company's new operating model, implemented last year, which aims to bring the core gaming business into the parent entity. This will increase the parent firm's revenue and free cash flow, which can then be deployed for both organic and inorganic growth.

In an interview to Moneycontrol in May 2024, founder Nitish Mittersain said he expects the core gaming business to become the largest revenue generator for the company over the next two or three years.

Nazara Technologies is also partnering with Open Network for Digital Commerce (ONDC) to launch an in-game monetisation platform, gCommerce, designed to help game developers boost their monetisation efforts.

Slated for a Q1- FY26 rollout, the platform will enable developers to integrate e-commerce within games, thereby providing them with new revenue streams.