Nazara Technologies IPO Review & Recommendations @ Chanakyanipothi.com , India`s Oldest & most Trusted Investment Blog.Operational since 8th December 1999, this is the Only Investment Platform in India, which has successfully completed 21 Years
Nazara IPO live Review :
Nazara Company Details
The digital gaming market worldwide has seen a paradigm shift in distribution, adoption as well as user behaviour.
In the late 1990s and 2000s, basic computer gaming evolved to a wide universe of serious followers who indulged in
expensive CD/DVD-ROMs, cartridges, handheld devices, and gaming consoles such as the Xbox, Wii and PlayStations, despite the limited shelf-life of each game. But smartphones and internet connectivity changed that.
Since 2009, there has been a gradual shift towards mobile gaming. The availability of thousands of professional quality games with varying levels of difficulty on app stores, social media, and even pre-loaded on mobile devices and tablets popularized gaming among millions of users worldwide making it a dominant form of entertainment.
The global games market generated revenue of $104.8 billion in 2016 & will continue to increase to $151.7 billion in 2021. Growth is expected to be driven from South-East Asia, Middle East and India as these regions have an advantage of optimistic economic outlook, favourable demographics and rising growth in smartphone penetration and internet.
The Indian gaming market is still relatively small, and contributed an estimated US$338.4 million in total revenue in
2017. However, the market is forecast to grow very strongly, reaching US$1.1 billion in 2021, almost entirely driven by growth in mobile gaming revenue.
South East Asia is one of the highest growth regions in the world in terms of gaming revenue and number of gamers, driven by increasing internet penetration rate, rising incomes and easy availability of budget smartphones. Overall gaming revenue in the region is forecast to grow from US$1.3 billion in 2016 to US$5.5 billion in 2021.
Sports has always been insulated from mega-trends disruptions and helped drive consistent growth for the entertainment sector across all platforms including Free to Air Television, Pay TV Services, On-Demand video,
Internet live streaming, and Social Media.
Esports business models are slightly different from that of digital gaming and more similar to that of professional sports leagues.
With majority of the Indian population increasingly consuming their entertainment content online or from their smartphones, there is a spike in interest for mobile gaming, especially among the younger demography.
Now lets discuss , what is the business of Nazara :
Nazara is one of the leading mobile games companies headquartered in Mumbai, which is engaged in acquisition of, value addition to and distribution, of mobile games across emerging markets such as India, Middle East, Africa, South East Asia and Latin America.
Its operations comprise of
a) Subscription Business,
b) Freemium Business and
c) esports business.
Its subscription services were accessed by 130.43 million monthly visitors from 61 countries across emerging markets, and over 4.08 million paying users subscribed to its subscription services, and downloaded over 37.62 million games, in September 2017.
Its Subscription Business is focussed on mass mobile internet users in the emerging markets, comprising largely of first time mobile gamers..
The Company is offering its Subscription Business services through 113 telecom operators in 61 countries, including but not limited to Airtel, Vodafone and Idea in India; and Etisalat and Ooredo in the Middle East.
Its Subscription Business has a lean operating cost model and a highly optimised consumer acquisition strategy, which has enabled it to consistently generate returns from low Average Revenue Paying User (ARPU) telecom subscribers, across emerging markets.
The Promoters, who have over 15 years of experience in the mobile entertainment/ gaming industry.
Nazara Jewellers IPO Main Objects
The objects of the Offer are to achieve the benefits of listing Equity Shares
Nazara IPO Details:
IPO Opens on : 17 March 2021
IPO Closes on : 19March 2021
Nazara IPO Price Band Per Equity Share: Rs. 1100-1101
Shares offered to
QIB(75%) 3970794 Shares = Rs 437.18Crs
NII (15%) 794159 Shares = Rs 87.44 Crs
RII (10%) 529439 Shares = Rs 58.29 Crs
Now the queation is whether you should Apply in this IPO ?
ESL Gaming Gmbh is world’s No. 1 Gaming company and has total revenue of $95.02 million and has $425-million valuation of ESL speaks to the potential . So roughtly, the valuation ratio is 5 times the revenue. Nazara has earned revenue of Rs. 262 crore in the year 1920 and hence the valuation can be assigned Rs. 1310 crore and accordingly per share valuation comes to Rs. 436. so from that angle, the IPO is offered at very high valuation.
Earnings per Share in 2018-19 was Rs 6.39
Earnings per Share in 2019-20 was Rs (0.77)
Earnings per Share in 2020-21,6M was Rs (1.78)
Book Value of the Share as on 30.09.2020 Rs 168.47
NAV after the IPO Rs. 168.46
So because of the losses, PEratio cannot be ascertained
however Upper price/NAV after IPO: 6.53, which can be considered as reasonable.
Another aspect is : the stock market players always have fancy for new economy businesses and more particularly for the companies which are first movers. And accordingly Nazara can enjoy first mover advantage.
Another aspect is very small offering for NIIs And RIIs and hence both the portions will be hugely oversubscribed and it will have its impact on listing price.
Current Grey Market premium for this IPO is also impressive.
Considering all above aspects, We believe that one may apply in this IPO.
It will be Lage to Lottery !!! ( means if you get allotment, it will be lottery winning !!)
Our Listing price Estimate will be updated on evening prior to listing Day
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