Nazara, where Big Bull Rakesh Jhunjhunwala holds a 10.82 per cent stake, would be the first gaming company to list in India. The ace investor did not participate in the Rs 583 crore crore offer for sale that took place from March 17 to 19.
Abhay Doshi, Founder at Gujarat-based at UnlistedArena.com, who tracks the grey market, said the stock was commanding Rs 770-780 premium in the grey market. Others also quoted similar premia. This suggests a 71 per cent premium over the issue price.
Elara Capital, which recently reiterated its positive stance on Nazara, said the company has the first-mover advantage in eSports, which is estimated to surge in the near term. It said concerns over freemium games, such as the World Cricket Championship (WCC) persist due to lack of monetisation opportunity in India.
Nazara also lacks a big play in the real money gaming (RMG) segment within gaming, which is a huge untapped opportunity, it said.
Astha Jain of Hem Securities said the issue looked aggressively priced, but the valuations justified the huge market opportunity that Nazara has, and the growth it may see going ahead. She anticipates strong listing for the stock and believes it is a long-term bet.
The IPO was subscribed 176 times, which was third biggest among the issues with a size of over Rs 200 crore. HNIs had lapped up the issue, bidding for a whopping 390 times. Retail investors had subscribed to their quota by 75 times and qualified institutional bidders (QIBs) 104 times.
The size of the Indian gaming industry stands at barely $1.5 billion against the global industry size of $157.50 billion in 2020. Rising smartphone and internet penetration are leading the growth for the industry. Analysts liked Nazara given its leadership in a highly under-penetrated market, wide product portfolio, strong relationship and network. They expected the mobile gaming firm to witness strong growth for next 2-3 years given its recent acquisitions and first mover advantage.
