Nazara Technologies: Blockbuster to be IPO for Rakesh Jhunjhunwala’s investment company, shares at 80% premium in gray market?

Nazara Technologies IPO: The IPO of gaming and sports media platform Nazara Technology is being launched on 17 March.

Nazara Technologies IPO: The IPO of gaming and sports media platform Nazara Technology is being launched on 17 March. The company aims to raise Rs 582.91 crore through an IPO. There will be no new shares issued, the funds will be raised by the existing shareholders through the Offer for Sale (OFS). The IPO can be subscribed till 19 March. The price band of Rs 1100-1101 has been fixed for this issue. Explain that Rakesh Jhunjhunwala, a veteran investor in the stock market, has about 11 per cent stake in Najara Technology. But he will not reduce his stake. Currently, there is a lot of craze among the investors regarding the IPO.

Shares in the gray market at a premium of Rs 840-850

In the gray market, premiums have been paid for the shares of View Technology. Shares in the gray market have reached a premium of Rs 840-850. The issue price for the IPO is Rs 1100-1101. That is, in the gray market, they are seen trading at a premium of around 80 per cent. While the shares of Suryoya Small Finance, which was launched on March 17 itself, are at a premium of Rs 30-35. While the launched Lakshmi Argonics, Kalyan Jewelers and Craftsman Automation are also lower than the premium technology in the gray market.

Lot size

Najara Technologies has placed a lot size of 13 equity shares for the IPO, meaning that bids will be placed for at least 13 equity shares. Investors will have to invest at least Rs 14,313 based on the upper price band. A maximum of 13 lots can be bid, that is, a maximum of Rs 186,069 can be invested in it.

How much reserve for

In the IPO, 75 per cent is reserved for qualified institutional buyers (QIB) and 15 per cent for non-institutional investors. Only 10 per cent is reserved for retail investors.

About the company

The founder of Najara Technology is Nitish Mitrasen, who founded the company in 2000. Najara Technology is known for games like World Cricket Championships, Chhota Bheem, Mota Patlu series. Its subsidiary company Nodewing Gaming organizes various gaming events across the country. The company has business in more than 60 countries like India, Africa, Middle East, South East.

To increase penetration in the gaming and sports media space, the company has made several acquisitions across multiple gaming categories. The company’s platform hosts multiple content categories, including subscription business, freemium business and esports business. In smartphone gaming, Nazara Technology has built a strong network of millions of customers in the last few years.

Financial

The company’s financial health is fine. The company has raised 12.63 crores in 2005 and 2007 and 76.53 crores in 2018. The company’s EBITDA during the 6-month period ended in September 2020 through operations was 12.65 crore. EBITDA margin reached 6.11 percent, which was 3.48 percent by March 2020. Conso revenue growth has been 45.9 percent in FY20. However, during this time the company incurred a loss of about 27 crores. Whereas in FY 2019, the company was profitable.

Issue management

The issue will be managed by IIFL Securities, ICICI Securities and Nomura Financial Advisory & Securities. Link is the registrar of the intime issue. The shares of the company will be listed on both the BSE and NSE exchanges.