Nazara Tech stock jumps 12% on ₹100 cr fundraise from Kamath brothers

Shares of Nazara Technologies jumped 12% after the online gaming company announced a ₹100 crore fundraise from Zerodha's Kamath brothers.

E-sports company Nazara Technologies on Monday said that its board has approved preferential allotment of equity shares to raise up to ₹100 crore from Nithin Kamath and Nikhil Kamath-owned Kamath Associates and NKSquared.

Reacting to the development, the stock hit a 52-week high of ₹854 apiece on the National Stock Exchange (NSE) after opening at ₹770. The company's market cap stood at ₹5,518.91 crore.

The company is proposing to issue 14,00,560 equity shares of face value of ₹4 each at a price of ₹714 per equity share aggregating to ₹99.99 crore proportionately to M/s Kamath Associates and M/s NKSquared, Nazara Technologies says in a stock exchange filing.

Kamath Associates and NKSquared are partnership firms represented by their partners Nikhil Kamath and Nithin Kamath.

The infusion of fresh funds will be utilised to invest in funding requirements and growth objectives of the company including for making strategic acquisitions and investments in various companies, meeting growth and funding requirements based on the business opportunities across the subsidiaries, the filing says.

"Nikhil Kamath symbolises success in India's tech arena, and this fundraise holds immense value for us at Nazara as we continue to build a diversified gaming platform in India. Beyond the funds raised, his investment stands as a resounding vote of confidence in Nazara," says Nitish Mittersain, chief executive officer of Nazara Technologies.

Commenting on the investment in Nazara, Nikhil Kamath, partner of Kamath Associates and NKSquared, says, "Gaming in India is poised for strong growth in the years to come and Nazara has built a well-diversified, profitable gaming platform well suited to take advantage of opportunities in the years ahead. We look forward to supporting Nitish and his team in achieving their growth aspirations for Nazara."

Formed in 1999, the Rekha Rakesh Jhunjhunwala-backed firm is the first gaming company to be listed on the stock exchanges with a presence in India, Africa, and North America. Nazara Technologies has diversified offerings across the interactive gaming, e-sports, ad-tech and gamified early learning ecosystems including World Cricket Championship (WCC) and CarromClash in mobile games, Kiddopia 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.

The company reported a 31% year-on-year rise in net profit at ₹20.9 crore for the quarter ended June compared with ₹15.9 crore in the corresponding quarter last fiscal. Revenue rose 14% to ₹254.4 crore in Q1 FY24 from ₹223.1 crore in the previous corresponding quarter. Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 10% to ₹33.1 crore.