NEW DELHI: Nazara Technologies made a bumper market debut on Tuesday, as the shares listed at Rs 1,990 on NSE, a 80.74 per cent premium over the issue price of Rs 1,101. On BSE, the scrip got listed at Rs 1,971, a 79.02 per cent premium.
Nazara has become the first gaming company to list in India. The 10.82 per cent stake ace investor Rakesh Jhunjhunwala holds in the company was worth Rs 656 crore at listing. In valuation terms, it has become his sixth largest stock bet.
To boot, Jhunhunwala did not participate in the offer for sale. He is believed to be sitting on huge gains on his mobile gaming investment. He had invested Rs 180 crore in the gaming firm in 2008.
The much-followed Rs 583 crore IPO, shares under which were sold between March 17 and 19, was a big hit among investors.
The IPO received a whopping subscription of 176 times, which was the third biggest for an IPO with an issue size of over Rs 200 crore. HNIs lapped up the issue, bidding for 390 times their quota limit. The portion reserved for qualified institutional bidders (QIB) was subscribed 104 times, and that for retail investors 75 times.
Despite so much fanfare, some of the recent IPOs have failed to offer reasonable listing pop in debut trade, but analysts were largely positive on Nazara.
This, even when the business has been making losses on the face of it. On that basis, the issue looked aggressively priced, said Astha Jain of Hem Securities. Yet, she insisted that the asking valuations justified the huge market opportunity that Nazara has, and the growth it can log going ahead. She had anticipated a strong listing for the stock, and believes it can be a long-term bet.
Speaking at the Times Network India Economic Conclave 2021 last week, Rakesh Jhunjhunwala said he would have made 20 private equity investments by far, but 10 of them turned out to be duds, or were written off.
The Big Bull said five of his other private equity investments delivered moderately while five others delivered beautifully. Nazara is likely to be counted among his profitable bets.
The global gaming industry size was pegged at $157.50 billion in 2020, while the size of the Indian gaming industry stood at merely $1.5 billion, roughly 25 per cent of Bollywood.
Rising smartphone and internet penetration are leading growth for the industry.
Analysts liked the Nazara issue, given its leadership position in a highly under-penetrated market, wide product portfolio, strong relationship and network. They expect the mobile gaming firm to witness strong growth over the next 2-3 years given recent acquisitions and first-mover advantage.
