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NAZARA Technologies IPO 2021 : Key Highlights and Company Details

Nazara Technologies is an online media platform functioning for sports, gaming and networking sectors. The company is actively serving the online community of kids and adults together. The company has multiple kids games and learning applications. The most famous one is KIDDOPEDIA. Nazara Technologies has also created multiple online and offline games for adults. These include the World cricket championship, Carrom clash and LUDO game. The company has a major stake of ace investor Rakesh Jhunjhunwala in it. Nazara began its operations in 1999. It offers its services in India, Africa, North America, Middle East and many more regions in the world. The company also has Sportskeeda and Nodwin for the eSports community. One new addition in it is Halaplay.

The company is actively involved in its subscription business and earns its maximum revenue from eSports and Gamified learning. Nazara aims to serve maximum online mobile users and gamers community as well.

Nazara Technologies IPO Detailes

The Nazara Technologies IPO is set to hit the Dalal Street on 30th March, 2021. The IPO is getting open for subscription on 17th March, 2021. The Subscription ends on 19th March, 2021. The issue is a book built issue and the Face Value per share is 4 Rs. The IPO price band is set at 1100 to 1101 Rs per share. The minimum size of shares for subscription is set at 13. Hence the minimum order quantity would be 13 shares. Also the maximum shares that one can opt for are 169 shares amounting to Rs. 186060 Rs.

The issue is set to raise Rs. 582.91 Crore Rs. The Issue includes only Offer for sale and no Fresh Issue. The fresh Issue is amounted to Rs. 582.91 Crore Rs. The IPO will be listed at both NSE and BSE. The registrar for the company is Link Intime India Private Limited.

Tabular Representation of IPO Details

IPO OPENING DATE	17th March, 2021
IPO CLOSING DATE	19th March, 2021
ISSUE TYPE	Book Built Issue
Face Value per share	4 Rs per share
IPO price band	1100 Rs – 1101 Rs per share
LOT SIZE	13 shares
MINIMUM ORDER QUANTITY	13 shares
ISSUE SIZE	582.91 Crore Rs.
OFFER FOR SALE	582.91 Crore Rs.
FRESH ISSUE	No Fresh Issue
LISTING AT	NSE, BSE
LISTING DATE	30th March, 2021

Important Dates

IPO OPENING DATE	17th March, 2021
IPO CLOSING DATE	19th March, 2021
IPO ALLOTMENT DATE	24th March, 2021
REFUNDS	25th March, 2021
DEMAT A/C CREDITED ON	26th March, 2021
IPO LISTING DATE	30th March, 2021

IPO will be launched on 17th March, 2021. The subscription would conclude on 19th March, 2021. The allotment would be processed by 24th March, 2021. The DEMAT A/C of shareholders would get credited on 25th March, 2021 with shares. The Refunds would be initiated on 26th March, 2021. The share would hit the Dalal street on 30th March, 2021.

Promoter and Lead Managers

The company has three major promoters. They are Nitish Mittersain, Mitter Infotech LLP and Vikash Mittersain. Promotes stake before IPO is 24.16%.

The major lead managers of the company are :

ICICI Securities Limited
Jefferies India Private Limited
IIFL Holdings Limited
Nomura Financial Advisory India Limited

Objectives for the Nazara Technologies IPO

The main reasons for public issue are :

The company is short on liquidity. The reason to bring up the IPO is to get some additional cash flowing and to get the benefits of public issues.
There are some existing shareholders who want to sell their holdings in the company. This stake is for more than 50 Lakh shares. Nazara Technologies wants to have a scattered equity shareholding and not a takeover by any company for the entire stake. This is a secondary objective why Nazara is raising the public issue.

Company Financials

Particulars (in Million Rs.)	2019-20	2018-19	2017-18
ASSETS	7769	5146	4708
REVENUE	2620	1861	1820
NET PROFIT	(267)	67	10

The company has a growing asset base. In 2017 the company had 4700 Million Rs of assets which increased to 5150 Million Rs. in 2018. The assets kept on increasing further as well. The assets amounted to almost 7770 Million Rs. This explains the company is expanding its product portfolio as well as its operation. This is a green flag for the investors.

However looking at the net profits the company is struggling through. The company has a slow and stable flow of revenue. The revenue increase is lesser in proportion than the increase in assets. This signifies that the company is unable to capitalize on its increasing asset base. The net profits display the worst side of the company. The company made only 10 million Rs in initial year with an investment of 4700 Million Rs. this means that company has high interest payments which decreases the company’s net profits. The net profits for 2017 is less than 1% of its revenue.

Net Profits from 2018 to Dec 2020

The company made more than 67 Million Rs in 2018. But the assets increased by 1000 Million Rs. However this raises a green flag for the company as the net profit margin has increased. In the next year the company booked heavy losses. The company reported almost 270 Million Rs of net loss. This comes at the end of 2020 March. In the current phase the net loss of the company at Dec 2020 is 100 Million Rs. Also the revenues are 2000 Million Rs. Hence this means the company is under heavy pressure of performance. The company needs to capitalize on its assets and perform better with new equity shareholders post IPO. If one is looking for long term investments then he or she should wait for the next quarter results.

Pros

The company is really active in the field of eSports and Kids Education channel. The company earns its maximum revenue from both these platforms.
It is a game developer for kids and adults both. Many famous games developed by the company are the World Cricket Championship, Ludo and Carrom.
The company has more than 22 years of experience in its field. Hence the company has expertise in this field.
Nazara has large holdings of Rakesh Jhunjhunwala in it. His stake equals to 11.5% approximately in the company.
The company is constantly expanding its asset base and hence working on its expansion.

Cons

The company’s net profits and revenues are not stable. They are continuously suffering though there is a rise in their asset base. The company is not able to capitalize well on its asset base.
The existing shareholders are selling their stake in the company. This stake amounts to nearly 50 Lakh shares. This is a red flag as one needs to worry why the existing shareholders are leaving. Also the company wants to get scattered equity shareholders stake for the same and not company involvement or takeover. Hence one should think twice before investing for the long term in this company.