Arihant Capital IPO report on Nazara Technologies
Nazara Technologies Limited (“Nazara”) was incorporated on December 8, 1999. Nazara 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, and offerings across the interactive gaming, eSports and gamified early learning ecosystems including World Cricket Championship (WCC) and CarromClash in mobile games, Kiddopia in gamified early learning, Nodwin and Sportskeeda in eSports and eSports media, and Halaplay and Qunami in skill-based, fantasy and trivia games. The business operates in different segments; Subscription-based business, Freemium Business, eSports, Gamified early learning, and Real money gaming. Subscription business focuses on mass mobile internet users comprising mainly first-time mobile gamers. The company derives maximum revenue from subscription fees charged from customers under the gamified early learning and eSports business segments, accounted for 71.03% of revenues for the six months period ended on Sep 30, 2020.
Valuation and Outlook
Nazara Technologies is one of the diversified mobile gaming companies in India that has presence in developing and emerging global markets. The company’s IPO will be the first pure play gaming company. At the upper price band of INR 1101, issue has been offered at a Price/Sales multiple of 5.5 (x) to itsH1FY21 Sales of INR 200cr .While the company's negative earnings for the past 18 months, the issue is being offered at a negative P/E. Nazara’s competitive advantage comes from its capabilities in-house content creation. Being the first mover, it might catch fancy post listings. However, one can Subscribe for listing gains.
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