BENGALURU: Mumbai-based Nazara Technologies has roped in ICICI Securities and Edelweiss Financial Services for a Rs 1,000-crore IPO by the end of financial year, in what could be the first public listing in the gaming space, according to two sources familiar with the development.
Founded in 2000 by Nitish Mittersain, Nazara could be valued at Rs 3,000-3,500 crore which is expected to give investor WestBridge Capital a whopping 75-80 times return on its 12-year-old bet.
One of the rare highly-profitable companies in India's digital market, the public issue is expected to give WestBridge Capital a partial exit.
The private equity firm has invested a total of $3 million in two tranches in 2005 and 2007, and currently owns around 55% stake. Rest of the shares are held by Mittersain, who founded the company in his early 20s, and his family.
“The company is planning to finish the listing process by end of March 2018, and is expecting a valuation of 30-35 times projected profit after tax (PAT) of Rs 100 crore in FY19,“ said one of the sources mentioned above.
Nazara, popularly known for its Chhota Bheem game, had gross customer billings of over Rs 550 crore with PAT of Rs 66 crore, according to the company report.
It has been profitable since 2007.
The mobile gaming market in India will expand from $200 million in 2016 to $3 billion in 2019, according to a FICCI-KPMG last year.
With expansion of Jio and smartphone penetration, data consumption is expected to increase leading to increasing adoption of mobile games.
The public offering is likely to change the perception among investors of the gaming space, which has not seen any big bang deal unlike online commerce and event video con tent.
“Gaming is always seen in the Indian entertainment scenario as the poor cousin wher questions about revenue and scale are perpetually doubtful,“ said Jehil Thakkar, partner at Deloitte.
“It will alter the perception of in vestors who have been wary about the gaming sector and in the next 5-10 years one can expect more Indian gaming firms to go for an IPO You will even see traditional entertainment players eye gaming as an opportunity more se riously.“
Over the last decade, Nazara has also expanded globally to 74 countries as publisher thus diversifying its revenues across Africa and Middle East as well.
The plans for an IPO for Nazara comes at a time when the company is looking to expand from its focus on casual mobile gaming to become a broader ecosystem player in February, ET reported that Naza the space.
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In February, ET reported that Nazara Games has committed to investing Rs 136 crore in its eSports venture over the next five years. Nazara Games eSports league will enable gamers hooked on online games such as Dota 2 and League of Legends to participate in tournaments, catch live webtv programmes and chat on forums.
Another area it is looking to foray into includes real money skill-based gaming, for games like teen patti and poker.
It is also looking to actively pick up stakes in gaming startups, like last month it invested in game development studio Moong Labs, which it had partnered with to launch a 4D cricket game featuring Virat Kohli.