Nazara Technologies news

Nazara Technologies Approves ₹900 Crore Preferential Issue and Stake in Absolute Sports

On September 18, 2024, the board of Nazara Technologies, a leading mobile gaming company, approved two major decisions aimed at boosting its growth trajectory. The first decision involved a preferential equity issue worth ₹900 crore, subject to regulatory and shareholder approvals. The capital raised will be used to fund strategic acquisitions, support business expansion, and allow Nazara to capitalize on new growth opportunities in the global gaming market. Nazara Technologies news

Preferential Equity Issue The ₹900 crore raised through this preferential issue will be placed with several prominent investors including SBI Mutual Fund, Junomoneta Finsol (an associate of Plutus Wealth), Think Investments, Discovery Investments, Mithun and Siddharth Sacheti, Cohesion Investments, Chartered Finance and Leasing, Ratnabali Investments, and Aamara Capital. This infusion will provide Nazara with a strong financial foundation to accelerate its long-term expansion plans. Nazara Technologies news

Additional Stake Acquisition in Absolute Sports In another significant move, Nazara Technologies approved an additional 19.35% stake acquisition in Absolute Sports, the parent company of Sportskeeda, for ₹145.5 crore. Nazara Technologies news, This acquisition brings Nazara’s ownership in Absolute Sports to 91%, further consolidating its position in the sports media industry. Of the ₹145.5 crore, 50% will be paid in cash, and the remaining amount will be settled through stock.

Expansion of Sports Media Portfolio Sportskeeda, the flagship brand of Absolute Sports, reaches millions of sports fans globally each month, with significant user engagement in India and the U.S., where it ranks as one of the top sports platforms. Absolute Sports has expanded its portfolio by acquiring Pro Football Network (PFN), SoapCentral, and Deltia’s Gaming, further diversifying into the sports and entertainment space.

Nazara’s Position in Global Gaming Nazara Technologies is a key player in the global gaming market, particularly in emerging markets such as India, the Middle East, Africa, Southeast Asia, and Latin America. It specializes in the acquisition, value addition, and distribution of mobile games in these regions.

Stock Market Performance Following the announcements, Nazara Technologies’ stock price rose 2.4%, closing at ₹1,095 per share on the NSE on September 18.

Advantages:

1. Capital Infusion for Expansion: The ₹900 crore raised through the preferential issue will fuel Nazara’s acquisitions and business growth, positioning it to seize new opportunities.
2. Stronger Financial Backing: Attracting marquee investors strengthens Nazara’s financial foundation, ensuring sustained growth and stability.
3. Increased Ownership of Sportskeeda: With 91% ownership in Absolute Sports, Nazara can now exercise greater control over Sportskeeda, a highly successful sports media platform.
4. Diversification of Sports Media Portfolio: The acquisitions of Pro Football Network (PFN), SoapCentral, and Deltia’s Gaming diversify Nazara’s portfolio, enhancing its reach in sports media.
5. Positive Market Reaction: The stock price increase of 2.4% reflects investor confidence in Nazara’s strategic decisions and future growth prospects.

Disadvantages:

1. Regulatory Approval Risks: The ₹900 crore preferential issue is still subject to regulatory and shareholder approvals, which could delay or impact its finalization.
2. Integration Challenges: As Nazara expands its stake in Absolute Sports and acquires new companies, it may face challenges in integrating these businesses and achieving synergies.
3. Stock Dilution: The preferential equity issue might dilute the existing shareholding of current investors, potentially impacting shareholder value.
4. Dependence on Acquisitions: Nazara’s growth strategy is heavily dependent on acquisitions, which could be risky if the acquired companies do not perform as expected.
5. Competition in Global Markets: Nazara faces intense competition from other gaming and media companies in the emerging markets where it operates.

Conclusion:

Nazara Technologies’ approval of a ₹900 crore preferential equity issue and the acquisition of an additional 19.35% stake in Absolute Sports marks a pivotal moment in its growth strategy. The capital infusion will bolster Nazara’s ability to fund strategic acquisitions and expand its business, while the increased stake in Absolute Sports solidifies its leadership in the sports media space. While the regulatory approval process and integration of acquisitions pose challenges, the company is well-positioned for continued growth in the global gaming and sports media sectors.

FAQs:

1. What is the purpose of Nazara Technologies’ ₹900 crore preferential equity issue?
   The ₹900 crore capital infusion will be used for strategic acquisitions, business expansion, and to capitalize on new growth opportunities.
2. Who are the major investors in Nazara’s preferential issue?
   Key investors include SBI Mutual Fund, Junomoneta Finsol, Think Investments, Discovery Investments, and others.
3. What does the additional stake acquisition in Absolute Sports mean for Nazara Technologies?
   Nazara’s ownership in Absolute Sports now stands at 91%, giving it greater control over Sportskeeda and strengthening its presence in the sports media sector.
4. How will Nazara’s acquisition of Absolute Sports benefit the company?
   By increasing its stake in Absolute Sports, Nazara can better leverage Sportskeeda’s global reach and expand into new markets through the acquisition of brands like Pro Football Network, SoapCentral, and Deltia’s Gaming.
5. What impact did the announcement have on Nazara Technologies’ stock price?
   Nazara Technologies’ stock price rose by 2.4%, closing at ₹1,095 on the NSE after the announcement.

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