Nazara Technologies IPO: The company 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 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, says Angel Broking in its report.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

See Zee Business Live TV Streaming Below:

Positives: (a) Leadership position in a diversified and scalable business

(b) Portfolio of premium intellectual property and content across regions and businesses

(c) Large and engaged community of users, with attractive monetization opportunities

(d) Successful inorganic growth through strategic acquisitions

(e) Profitable platform model benefitting from India growth story with limited regulatory risk

Investment concerns: (a) Company with global operations and subject to risks and uncertainties of conducting business outside India

(b) Company success is tied to the continued use of the internet and smartphones, and the reliability and adequacy of online infrastructure in India and emerging markets and data pricing

(c) Company may fail to compete effectively in the markets in which it operates

(d) Any inability to protect IP or any third-party claims in relation to infringement of existing intellectual property rights or in the future could materially adversely affect the business, reputation, financial condition, results of operations and cash flows.

Outlook & Valuation by Angel Broking: Nazara Technologies is present in the fast growing segment of interactive gaming, eSports and gamified early learning solutions. After posting a degrowth of 1.4% in FY2019 the company has posted strong revenue growth of 45.9% in FY2020 to Rs 247.5 cr. The company has already posted a revenue of Rs 200 cr. in H1FY2021. The company has been reporting losses as they have increased their spending significantly on advertising & promotion from FY2020 onwards which will help drive strong topline growth for the company. At current levels the stock is trading at EV/Sales of 11.6xFY20 revenues and we recommend a "SUBSCRIBE" rating to the IPO given strong growth potential for Nazara Technologies.

Nazara Technologies Highlights:

Issue Open: March 17, 2021
Issue Close: March 19, 2021

Offer for Sale: 0.53cr sh

QIBs 75% of issue
Non-Institutional 15% of issue
Retail 10% of issue

Promoters 20.7%
Others 79.3%
Fresh issue: 0 cr sh
Face Value: Rs 4
Present Eq. Paid up Capital: Rs 12.2 cr

Post Issue Shareholding Pattern
Post Eq. Paid up Capital: Rs 12.2cr
Issue size (amount): Rs 582-583cr
Price Band: Rs 1100-1101
Lot Size: 13 shares and in multiple thereafter
Post-issue mkt. cap: *Rs 3350 cr - **Rs 3353 cr
Promoters holding Pre-Issue: 23.0%
Promoters holding Post-Issue: 20.7%