Nazara Sets Aside $100 Mn For M&A To Expand Global Footprint

Gaming major Nazara Technologies on Tuesday (March 13) said it is earmarking $100Mn (around INR 830 Cr) towards mergers and acquisitions over the next two years.

The company said that this commitment marks its initiative to strengthen its global foothold.

Recently, Nazara secured INR 760 Cr ($90 Mn) via a preferential allotment backed by investors such as Nikhil Kamath, ICICI Prudential MF and Plutus Wealth Management, among others. 

The company said that it is looking forward to identifying burgeoning opportunities across gaming, esports and adtech sectors with a particular focus on established gaming IP’s / studios. It is also keen on those advancing in technologies like Web3, Virtual Reality and AI.  

Nitish Mittersain, Jt. MD & CEO of Nazara Technologies, said, “Nazara has seen significant success in its ‘acquire and scale’ strategy over the last few years as can be seen by the post-acquisition growth in Kiddopia, Nodwin Gaming and Sportskeeda among others.

Our unique decentralised model allows these businesses to operate autonomously by strong management and provides us with significant bandwidth to scale the platform we have created. The $100 Mn pledge will further boost this opportunity for us in that direction.”

“We are particularly focused on investing in and acquiring gaming studios globally with a specific focus on India’s 500 Mn gamers as well as the large North American market,” added Mittersain.

Over the past years, Nazara acquired several companies like Sportskeeda, Nodwin Gaming, Kiddopia to build key verticals. It has also bought small stakes in the likes of Snax Games, Pro Football Network LLC, Wings, and Datawrkz, among others. 

The company, which was listed on the stock exchanges in 2021, currently has a market cap of INR 4,930 Cr. It is currently trading at INR 649.80 apiece as of 2 pm with a previous close at 671.75.

It is pertinent to note that the gaming major recorded a 46% increase in consolidated net profit to INR 29.5 Cr in the third quarter of the financial year 2023-24 (FY24) from INR 20.1 Cr in the year-ago period.

However, operating revenue rose a mere 2% year-on-year (YoY) to INR 320.4 Cr in Q3 FY24. 

This comes at a time when the Indian online gaming startup ecosystem has been reeling under the impact of the 28% GST levied on the full value of bets placed in online games, regardless of whether it is a game of skill or chance. 

As a result,  the entire ecosystem is grappling with a turbulence. While, some such as Hike, Mobile Premier League (MPL) have laid off hundreds of employees, others such as Fantok have temporarily shut down operations. 

This has further been intensified with enforcement agencies issuing notices,  around 71 in number, against online gaming platforms for alleged tax evasion to the tune of INR 1.12 Lakh Cr. This has resulted in investors becoming wary of investing in the space, which has dried up funding for the ecosystem.