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About the Company

Nazara Technologies Ltd. (Nazara) is a leading diversified gaming and sports media platform. It has strong presence in India and across emerging and developed global markets such as Africa and North America. It offers interactive gaming, eSports and gamified early learning ecosystems including World Cricket Championship (WCC) and CarromClash in mobile games, Kiddopia in gamified early learning, Nodwin and Sportskeeda in eSports and eSports media, and Halaplay and Qunami in skill-based, fantasy and trivia games. Its goal is to cater to billion plus mobile internet players across emerging markets who have embraced social multiplayer interactive gaming as the foremost form of entertainment. The company derives revenue from five segments i) Gamified early learning (39.3%), ii) eSports (31.8%), iii) Telco Subscription (21.3%), iv) Freemium (4.5%), v) Real Money Gaming (3.1%). On the geographical front, India and US constitute 41.2% and 41.6% of its overall revenues. Its content is developed in India for the Indian as well as global audience, allowing it to achieve scale, as evidenced by an average of 40.17 million MAUs (Monthly Average Users) for FY20 and an average of 57.54 million MAUs across all games for the nine month period ended December 31, 2020.

Objects of the Issue

* To carry out the Offer for Sale of up to 5,294,392 Equity Shares by the Selling Shareholders

* To achieve the benefits of listing the Equity Shares on the Stock Exchanges

Valuation

Globally, the mobile games market is expected to grow at 15% CAGR to USD 116 billion by 2023. In India, the mobile gaming is the largest and the fastest growing segment compared to PC and Console gaming. The mobile gaming market has grown from USD 0.3 billion in 2016 to USD 1.2 billion in 2020. This segment is expected to register strong CAGR of 39.6% over 2020-23 to reach USD 3.1 billion by 2023. This would be led by favorable demographics, rising adoption of smartphones, drop in data prices, increased internet penetration and high internet speeds.

Nazara is well placed in the online gaming space given its leadership position. Its diversified set of offerings, portfolio of premium intellectual property, large and engaging user base, strong relationship with telecom operators & app stores are some of its key strengths. Also its geographical reach across India, Middle East, Africa and North America bodes well for the growth. Its content in India for Indians as well as global audience helps the company to achieve scale.

Going forward, the company intends to build on its leading position by strengthening its relationship with mobile gamers, sports fan and existing partners. Additionally, expanding its offerings footprint to heterogeneous cohorts of gamers will further deepen its competitive moats to defend and grow its strong market position.

It would also look to enhance existing offerings and increase monetization opportunities. In terms of financial performance, while revenues have grown at CAGR of 20% over FY18-20, the company reported a net loss in FY20. Given the nascent stage of gaming market in India and huge growth potential, we are positive on Nazara from a long term perspective. Some of the key risk includes technological disruption and regulatory changes.

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SEBI Registration number is INZ000174330

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