This Rakesh Jhunjhunwala-backed stock hits 52-week low; falls 10% in a week

Ace investors Rakesh Jhunjhunwala-backed gaming and tech firm Nazara Technologies extended the losing streak for the fourth straight session and hit a new all-time low of ₹1,008.05 apiece on Monday after it unveiled a plan to invest in its material subsidiary Absolute Sports and gaming accessories manufacturer Brandscale Innovations. The proposed investments intend to further consolidate its holding in a fast-growing and highly profitable subsidiary as well as recently acquired Brandscale Innovations.

Reacting to the news, Nazara Technologies shares opened higher at ₹1,079.95, against the previous closing price of ₹1,050.55 on the BSE. Reversing opening gains, the gaming stock declined as much as 4% to hit a fresh record low of ₹1,008.05. The stock finally settled day’s trade at ₹1,020.75, down 2.84%. In contrast, the BSE Sensex ended 237 points, or 0.46%, higher at 51,597 levels, snapping a six session losing streak.

Nazara Technologies, which made debut on March 30, 2021, have delivered flat returns to its shareholders as it traded near its issue price of ₹1,101. It has fallen 70% from its 52-week high of ₹3,354.40 touched on October 11, 2021. Nazara, the first Indian gaming company to be listed on the stock exchanges, has given a negative return of 34% in the last one year, while it fell 58% in the calendar year 2022. The gaming stock has shed nearly 16% in a month and 10% over a week.

As on March 31, 2022, Rakesh Jhunjhunwala owned a 10.10% shareholding in Nazara Technologies, shareholding pattern data shows.

Nazara Technologies, which offers subscription-based business, eSports, gamified early learning and money gaming, in an exchange filing on Monday said its board has approved an additional investment of ₹20.10 crore in its material subsidiary Absolute Sports Private Limited, which operates the sports news website Sportskeeda. The transaction will be done by way of secondary purchase of equity shares of Absolute Sports from Porush Jain, promoter of the company. The deal is subject to negotiation and agreement on definitive documentation and fulfillment of the certain conditions and receipt of corporate and regulatory approvals required, if any.

Besides, Nazara’s board also approved an investment of up to ₹10 crore in Brandscale Innovations by way of subscription to optionally convertible debentures, payable in cash, in one or more tranches. “Brandscale Innovations is currently performing exceptionally well and in order to further accelerate their growth, the Company is making the aforesaid proposed investment. This will further consolidate Nazara’s Group holding in Brandscale Innovations,” it said.

In April this year, Nazara’s subsidiary NODWIN Gaming purchased a 35% stake in Brandscale Innovations for ₹10.01 crore. Besides, in June last year, it had acquired a 69.82% stake in Middle East- and Turkey-based mobile gaming publishing agency Publishme for $2.7 million.