In a strategic move, Nazara Technologies’ board has given the green light to issue shares worth ₹100 crore to Zerodha’s founders, Nikhil and Nithin Kamath. Nazara’s board approved the deal, while the gaming and sports media platform confirmed the decision of issuing up to 14,00,560 equity shares for cash. These shares will be priced at ₹714 per equity share (face value of ₹4), aggregating to a substantial amount of ₹99,99,99,840. The shares in question will be locked in for a period of 6 months from the date of issue.
The recipients of these shares are M/s Kamath Associates (a partnership firm represented by its partners Nikhil Kamath and Nithin Kamath) and M/s NKSquared (a partnership firm represented by its partners Nikhil Kamath and Nithin Kamath), as detailed in a regulatory filing. This investment follows media reports that stated that Nikhil was aiming to increase his stake in the company from 1% to about 3.5%. The news resulted in Nazara shares climbing steeply on Monday – clocking a rise of 10.53% to reach a 52-week high of ₹839.15, priced at ₹829.65 at the time of writing.
This also marks the second time in as many months that the Nazara is getting an infusion of fresh funds. July saw the company raise funds through the issue of equity shares. At that time, the board of directors approved raising its authorized share capital from ₹30 crore to ₹50 crore.
Nikhil Kamath’s investment comes at a propitious time for the gaming industry in India. Projections indicate substantial growth in the sector, with the Indian gaming market expected to expand from $2.8 billion in 2022 to $5 billion in 2025, at a robust CAGR of 28-30 percent. Key drivers include the widespread availability of affordable internet, the pandemic and subsequent lockdown, and high-performance smartphones, which have fuelled the gaming market’s expansion.
“Nikhil Kamath symbolizes success in India’s tech arena, and this fund raise holds immense value for us at Nazara as we continue to build a diversified gaming platform in India. Beyond the funds raised, his investment stands as a resounding vote of confidence in Nazara,” said Nitish Mittersain, CEO of Nazara Technologies. According to Nazara, the fresh funds are set to be deployed towards fuelling investments in funding requirements and growth objectives, which includes for making strategic acquisitions and investments in various companies meeting growth and funding requirements.
“Gaming in India is poised for strong growth in the years to come and Nazara has built a well-diversified, profitable gaming platform well suited to take advantage of opportunities in the years ahead. We look forward to supporting Nitish and his team in achieving their growth aspirations for Nazara,” added Nikhil Kamath, Partner, Kamath Associates & NKSquared.