Nazara’s surprising release with 81% premium

The shares of Nazara Technology opened with 80.74 percent more on the issue price on March 30.

Earlier, the analysts expected a premium of 50-60 percent. The subscription was 175.46 times. The company is a leading gaming platform in the country. The analysis predicted that the company’s growth projectile and business model will benefit the investors.

The issue price of the share was Rs 1,101. However, the share listed on NSE at Rs 1,990 that amounts to 81 percent more than the issue price. On the other hand, the listing was 79 percent more than its issue price that is, at Rs 1,979.

The company generated Rs 583 crore through the public offer. The offer opened on March 17-19.

Earlier, in fiscal year 19, the company declined by 1.4 percent in terms of revenue. However, the company picked-up pace and earned revenue in FY20 of 45.9 percent.

According to the reports, the company made huge expenses on promotion and advertisement in FY20.

In the offer, the subscription of non-institutional buyers was 390 times. The qualified institutional buyers subscribed by 104 times and retail investors subscription went up by 7.55 times.

A significant portion of the revenue generated by the company comes from the subscription fees paid by the end-user. The strong customer base comes from the learning content service and eSports business.

Additionally, the brokerage companies mentioned their preference towards the shares of the gaming company. They expect the company to show a 30 percent compound annual growth rate in years 20-23. Also, customer engagement will increase with increase internet provision and Smartphone penetration.

Besides, the company owns prominent intellectual property like WCC and CarromClash in mobile games, Sportskeeda in eSports, etc.

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