In a strategic move that underscores the growing prominence of the Indian gaming industry, Nikhil Kamath, the Co-founder and CEO of Zerodha, one of India's leading stockbrokers, is reportedly set to acquire an additional stake in Nazara Technologies, a homegrown gaming platform. This development comes at a time when the Indian gaming market is experiencing remarkable growth, poised to surge from $2.8 billion in 2022 to an impressive $5 billion by 2025, with a Compound Annual Growth Rate (CAGR) of 28-30 percent. In this article, we delve into the details of this acquisition and its implications for both Kamath and the thriving gaming industry in India.
Nikhil Kamath is not a newcomer to the Nazara Technologies story. Currently holding approximately 1 percent of the company's stake, Kamath is now eyeing an additional 3.5 percent stake in Nazara Technologies. This move is part of his personal investment strategy, emphasizing his confidence in the potential of the gaming platform. The acquisition is a testament to Kamath's belief in the Indian gaming industry's ability to deliver substantial returns.
The Indian gaming industry has been on a meteoric rise in recent years. With a burgeoning user base and increasing smartphone penetration, the sector has witnessed exponential growth. This trajectory is further accelerated by the rising popularity of mobile gaming, making Nazara Technologies a compelling prospect for investors like Nikhil Kamath. As Nazara Tech remains tight-lipped about the details, the deal's closing is eagerly anticipated.
Nazara Technologies is poised for expansion, with a shareholders meeting scheduled for September 4. One of the key agenda items is likely to involve raising capital by issuing equity shares on a preferential basis. This move aligns with the company's vision to leverage the growing gaming market. Notably, Nazara had previously invested nearly Rs 4.15 crore through its subsidiary, Nazara PTE Ltd, in Snax Games Ltd, an Israeli game developer, showcasing its commitment to diversification and expansion.
Financially, Nazara Technologies has been performing impressively. In the first quarter of the current financial year, the company reported a remarkable 31 percent surge in profit after tax (PAT), amounting to Rs 20.9 crore year-on-year. Furthermore, the company's revenue grew by 14 percent year-on-year to Rs 254.4 crore, and its EBITDA increased by 10 percent to reach Rs 33.1 crore for the quarter ending June 30. These robust financials underscore the potential for investors like Nikhil Kamath to benefit from the company's growth trajectory.
Nazara Technologies boasts a diverse portfolio encompassing interactive gaming, eSports, ad-tech, and gamified early learning ecosystems. Among its notable offerings are the World Cricket Championship (WCC) in mobile games, Kiddopia, and Wildworks in gamified early learning, Nodwin, PublishMe, and Sportskeeda in eSports and eSports media, OpenPlay, Halaplay, and Qunami in skill-based, fantasy, and trivia games, and Datawrkz in digital ad-tech. This diverse range of products and services positions Nazara Technologies for further success in the competitive gaming landscape.
Nikhil Kamath's decision to acquire an additional stake in Nazara Technologies underscores the promising future of the Indian gaming industry. As the market continues to surge, Nazara Technologies' expansion plans and financial performance make it an attractive prospect for investors. With Nazara Technologies poised to discuss raising capital, the Indian gaming industry's growth story is set to become even more compelling. Nikhil Kamath's move is not only a strategic investment but also a testament to his belief in the thriving Indian gaming ecosystem.
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