Nazara To Raise INR 250 Cr Via Preferential Issue, Kamath Brothers To Infuse Another INR 100 Cr

Diversified gaming and sports media major Nazara Technologies on Wednesday (January 17) said its board has approved preferential allotment of equity shares to raise up to INR 250 Cr.

The company, in an exchange filing, said it will use the fresh funds to attain its growth objectives, including making strategic acquisitions and general corporate purposes. 

The company has proposed to issue up to 28.66 Lakh equity shares at a price of INR 872.15 per equity share, which aggregates to almost INR 250 Cr. Of this, shares worth INR 100 Cr will be issued to NKSquared and Kamath Associates, two entities of Zerodha cofounders Nikhil and Nithin Kamath.

The development comes months after Nazara’s board approved a proposal to raise up to INR 750 Cr in July 2023. The company then raised INR 510 Cr from the Kamath brothers and SBI Mutual Fund in September last year. 

The Zerodha cofounders then invested INR 100 Cr in Nazara through Kamath Associates and NKSquared.

With the latest investment of another INR 100 Cr, the stake of the Kamath brothers in the company is expected to increase to about 5%.

Besides the Zerodha cofounders, ICICI Prudential MF and Plutus Wealth are also set to increase their stake in Nazara. While Plutus Wealth is set to infuse INR 50 Cr, ICICI Prudential is expected to inject INR 75 Cr in total through its various funds. Chartered Finance & Leasing Ltd would invest INR 25 Cr in the gaming company.

This successful fundraise represents a significant milestone for Nazara and concludes the planned fundraise of INR 750 Cr that was announced earlier in FY24, the company said in its statement.

“We are immensely grateful for the robust support from our esteemed investors, such as Nikhil Kamath, ICICI Prudential MF, and Plutus Wealth, who have substantially increased their investments in Nazara. This not only reinforces their belief in our strategic vision and direction but also significantly strengthens our financial standing,” said Nitish Mittersain, founder and CEO of Nazara Technologies.

“With our consolidated cash reserves now exceeding INR 1,500 Cr, Nazara is exceptionally well-positioned to pursue both organic growth and strategic acquisitions,” he added.

In a conversation with Inc42 last year, Mittersain said that a large portion of the fresh capital from the new investments would be used for acquisitions, especially of gaming studios.

Last month, Nazara announced partnerships with four Indian gaming studios to publish five casual and mid-core games in the country.

As the company continues its acquisition spree, it is also set to acquire a 10.77% stake in Kofluence Tech Private Limited from certain existing investors of the latter through a share swap deal. With this partnership, the companies are planning to launch an influencer-driven game discovery platform.

Nazara made the fundraise and acquisition announcements after market hours today. Its shares ended today’s trading session 3.1% lower at INR 937 on the BSE.