Nazara: Will Nazara’s IPO mainstream Indian gaming industry?
But its recently filed draft red herring prospectus (DRHP) paints a picture of how the company is doing. Its revenue fell by around 10% to Rs 190 crore in FY17 while profit also decreased 10% to Rs 59.7 crore.
While India’s consumer internet market is dominated by cashguzzling businesses reporting huge losses, the 19-year-old Nazara was able to build its business until six months ago just on Rs 20 crore in funding. It crossed gross customer billings of over Rs 550 crore in FY17.
The company had cash and bank balance of Rs 179 crore as of September 2017. The remaining capital raised by Nazara has come in the run-up to the IPO in the last six months, which have mostly involved sale of shares by investor WestBridge Capital. In terms of funds raised, the company so far has raised primary capital of Rs 88 crore and a secondary capital of Rs 540 crore, counting the likes of trader Rakesh Jhunjhunwala among its investors.
Nazara’s IPO “will alter the perception of investors who have been wary about the gaming sector,” said Jehil Thakkar, partner at Deloitte. “In the next 5-10 years, one can expect more Indian gaming companies to go for an IPO after seeing Nazara’s (IPO) this year. You will even see traditional entertainment players eye gaming more seriously as an opportunity.”
According to Nazara, monthly active users increased from 2.79 million in 2016 to 8.66 in September 2017, including 4.08 million paid users. Over 95% of the company’s revenue comes from subscription and game downloads.
“In nine of the first 10 months of calendar year 2017, nine of our company’s in-house games have been ranked among the top three games by downloads on the top free charts on the Google Play Store,” Nazara said in its DRHP.
Recently, the company acquired a majority stake in leading esports gaming company Nodwin Gaming. Its other investments include Mastermind Sports, HalaPlay and Moong Labs.