Nazara To Pick Additional 19.5% Stake In Nextwave, Shareholding Now Stands At 71.88%

The listed gaming startup Nazara Technologies said on Tuesday (May 9) that it has agreed to purchase an additional 19.5% stake in its subsidiary Next Wave Multimedia (Nextwave) in an all-cash deal worth INR 15.5 Cr (around $1.89 Mn).

Before the latest deal, Nazara held a 52.38% stake in Nextwave; adding the latest acquisition, the company’s total stake stands at 71.88%.

“The said acquisition shall help the company in strengthening its portfolio of offerings in the virtual interactive sports genre in India and other emerging markets. Further, the said acquisition is also in line with the growth objective of the company and with a view to consolidating its shareholding in Nextwave,” said Nazara in a statement.

The deal was a secondary purchase of 6500 equity shares on Nazara’s behalf, as the listed startup also reserves the right to further extend its shareholding in Nextwave. Nazara agreed to purchase the shares on Tuesday.

“Further, the company also reserves an option to acquire the balance equity shares held by the founding shareholders of Nextwave as part of subsequent closing within a period of 15 months from the initial closing date of the share purchase agreement,” the listed gaming startup’s regulatory filing with the stock exchanges said.

The game development studio’s board of directors has also been shaken up after the acquisition, as now it would have three non-executive directors from Nazara, along with two other directors. One of the directors would be nominated by the board, while PR Rajendran, the cofounder of Nextwave, will be a non-executive director as well.

Nazara first acquired a majority stake in Nextwave in January 2018, picking up the sports game development studio for an undisclosed amount. Incidentally, the latest deal also forms a part of the amendment agreement between the two companies finalised back in December 2017.

Nextwave, founded in 1995, develops sports-based mobile games, including games such as the World Cricket Championship, one of the most popular cricket games in the world. The company claims to have more than 100 Mn downloads across platforms over the past seven years.

According to Nazara’s filing, Nextwave had a turnover of INR 23.79 Cr in the financial year 2022-23 (FY23).

Meanwhile, Nazara saw its consolidated net profit rise 21% year-on-year (YoY) to INR 61.4 Cr in FY23 from INR 50.7 Cr in FY22. Revenue from operations zoomed 75% to INR 1,091 Cr during the year under review from INR 621.7 Cr in the year ended March 2022 on the back of broad-based growth across all three segments. 

While gaming revenue grew 28% YoY, esports and adtech verticals saw a 75% and 53% rise in revenue, respectively.