Rakesh Jhunjhunwala Picks Up Stake In Nazara

In his first bet on Indias digital space, Rakesh Jhunjhunwala picked up a stake of Rs.180 crore in gaming company Nazara Technologies. The company owns popular titles such as Chhota Bheem and Virat Cricket. The investment in Nazara helped the Mumbai-based company raise Rs.540 crore in the past three weeks.

Nazaras upcoming public offering scheduled for the middle of next year will get a leg up due to Rakesh Jhunjhunwalas investment. Edelweiss Financial Services and ICICI Securities will be the bankers for the IPO and Nazara is expecting a valuation between Rs.3,000 to 3,500 crore.

Commenting on the investment Jhunjhunwala said - I am always on the lookout for promising companies which are leaders in high-growth verticals. Nazara has a consistent track record of delivering profits, cash flows, along with efficient use of capital and high RoE. I see growth potential in the company.

Nitish Mittersain founder of Nazara said - The investment (from Jhunjhunwala) is from a 5-10 year long-term perspective and it is great to have strong hands like Jhunjhunwala who have staying power and dont have the need to sell based on short-term issues,.

Nazara logged gross customer billings of Rs.550 crore with profit after tax at Rs.66 crore in FY17 and it has been profitable since 2007.

Over the past decade, Nazara has expanded to 74 countries as a publisher, diversifying its revenues across Africa and the Middle East as well. The companys plan for an IPO comes at a time when it is looking to expand its focus on casual mobile gaming to become a broader ecosystem player. In February, ET reported that Nazara Games was committed to investing Rs 136 crore in its eSports venture over the next five years.

As per a FICCI-KPMG report, the Indian mobile gaming market is expected to expand from $200 million in 2016 to $3 billion in 2019. With telecom operators lowering voice and data rates amid intense competition, smartphone penetration in the country is expected to deepen and is expected to push up adoption of mobile games.