IPO Note - Nazara Technologies Ltd By Swastika Investmart
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* Leading mobile gaming and one of the leading live eSports streaming and on-demand eSports media content providers in India.
* Business operates in different segments; Subscription-based business, Freemium Business, eSports, Gamified early learning, and Real money gaming. The company derives maximum revenue from subscription fees charged from customers under the gamified early learning and eSports business segments.
* Strengths: 1) Leading eSports company. 2) Diversified business based on the geographical presence and gaming products. 3) Asset light business model.
* Risks: 1) Net Profit of the company is inconsistent. 2) Any changes in the government policies. 3) Audience base of hardcore gamers is low.
IPO Objective: 1) Listing benefits.
* IPO comprises an Offer for sale of 582.82 cr. The issue will open from Mar 17, 2021, to Mar 19, 2021. The issue is priced at 1100 to %1101 per equity share. The minimum order quantity is 13 Shares.
* Over the period of FY18-20 the revenues of the company has grown at CAGR of 12.90% while net profit were on declining mode this was due to the new acquisitions made by the company. In FY19-20, Nazara Tech revenue has grown by 45% YOYand it touched the revenue of 247 Crore in FY20. The margins of the company are expected to zoom from the current levels.
* Eyeing the growth of online gaming industry, the interaction with Smartphone and laptops of the youth and cheaper data prices, it is expected that gaming industry is expected to reach new highs. Thus, we assign a "Subscribe" rating for the IPO.
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