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Huge Whitespace: Global & India Gaming Market Opportunities

Nazara is well-positioned to benefit from the rapidly-expanding global and India gaming markets. India, despite being the second-largest (500Mn+) gamers’ base, remains under-monetised; In-App Purchases (IAP) conversion being less than 3% and Average Revenue Per User (ARPU) of USD 8–9 as compared with USD 17–18 in China. These offer significant upside as structural tailwinds (digital payments, 5G, Gen Z engagement) drive monetisation. Nazara’s global pivot, through acquisitions, such as Fusebox and ZeptoLab IPs, enhances exposure to high-ARPU markets, while leveraging cost-efficient Indian development and hybrid monetisation models. With IAP mix expected to rise, from 19% to ~35% by FY28E, and freemium business registering double-digit growth, Nazara stands to scale up rapidly across casual, narrative and premium genres.

Diversified, Defensible Ecosystem Spanning Platforms & User Cohorts

Nazara offers a diversified and defensible gaming ecosystem, spanning six highgrowth verticals – Gamified Early Learning, PC/ Console, Esports, Freemium, Offline Gaming and Adtech. As India’s only listed pure-play gaming platform, Nazara is uniquely positioned to capture growth in a global gaming market, which is projected to reach USD 201Bn by CY27E and the gaming market in India is set to double to USD 6 Bn by CY28E. With operations integrated across mobile, PC/console, offline platforms and monetisation models, from subscription to freemium, Nazara taps user cohorts, ranging from toddlers to mid-core gamers. The recent acquisition of Curve Games gives it access to the USD 95–100-Bn global PC/console market, enabling global distribution while leveraging India’s low-cost development base. This multi-pronged, global platform positions Nazara to capitalise on gaming megatrends with structural tailwinds.

Nimble Management, Acquisitive Play Engine

Nazara is strategically leveraging its “Friends of Nazara” M&A model to build a diversified, high-margin gaming and media portfolio. The platform-led approach focuses on acquiring capital-efficient, high-ROI assets and scaling them up through centralised user acquisition, monetisation (via Datawrkz) and publishing (via Curve). Successful integrations, such as Kiddopia and Nodwin (scaled 6–11x post-acquisition), highlight execution strength, while underperformers (e.g., Halaplay and Next Wave) have been pruned. Backed by a strong cash balance and good international revenue mix, Nazara maintains strong capital discipline.

Legislative Concerns Explained:

Nazara holds a ring-fenced minority stake in PokerBaazi, which is not consolidated in its financials. Downside is limited to approx. INR 10Bn of invested capital. We have impaired 80% of this investment, as PokerBaazi may still have optionality to pivot towards high-ARPU international markets or social poker monetisation model (through IAP/Ads). We value Pokerbaazi at INR 2Bn, basis robust tech platform & healthy cash reserves.

Investment View: We initiate coverage on NAZARA IN with a BUY rating and a 1-Yr forward SOTP-based TP of INR 1,400. We expect Revenue/ EBITDA to expand at a CAGR of 30.7%/44.5% over FY25-FY28E, driven by gaming-first focus and ramp-up of recent acquisitions.

Optionality: Gaming regulation in new gaming bill is expected to enhance investor confidence & open India to global titles. Nazara, through its publishing arm, is well-positioned to capture this optionality by partnering with external studios & bringing mobile/multi-platform games to both Indian & global markets.

Key risks: Regulatory headwinds in RMG, sub-scale presence beyond Nodwin and weak/ underperforming IPs impacting overall engagement and profitability

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