SBI MF buys 8% in Nazara for ₹410 crore

 September 07, 2023

 MUMBAI: The country’s largest asset management company SBIFunds Management Ltd, on Thursday, acquired around 8% stake in online gamingfirm Nazara Technologies Ltd, for ₹410 crore, which follows the 4 September ₹100 crore surprise investment by Nikhil and NithinKamath, the founders of India’s largest brokerage Zerodha Broking Ltd.

Nazara Tech, which has staged a stellar rally this year andgained over 39% in the last three months, said the firm will issue 5.74 millionfresh shares on preferential basis to three MF schemes of SBI Mutual Fund at ₹714 apiece.

SBI MFhad around ₹7.6trillion in average assets under management for the June quarter as thecountry’s largest fund manager.

 Kamath Associates and NKSquared (owned by Nikhil and NithinKamath) too were allotted 1.4 million shares on a preferential basis by NazaraTech on 4 September.

 “MakingIndia the gaming nation of the world has been a long-pursued dream for all ofus at Nazara," said Nitish Mittersain, CEO and founder of Nazara Tech.

 Nazara Tech is the country’s only listed gaming firm, and therecent bets by celebrity entrepreneurs Kamaths and the country’s largest AMCgive some indication of the growing fondness for gaming firms among investorsglobally, following Microsoft Corp.’s $75 billion ongoing acquisition bid forUK-based Activision Blizzard Inc.

Nazara Tech has seen a renewed momentum in its stock after theGST Council said last month that about plans to review its decision to impose a28% tax on online gaming.

 The firm has a monopoly in the country through popular onlinegames for kids and sports-oriented games such as cricket, tennis and carrom.

In 2023,Nazara Tech has acquired US-based Pro Football Network Llc (an analysiswebsite) that covers National Football League (NFL) and college football with73.27% stake.

 Nazara Tech joined the All India Gaming Federation (AIGF) as aprincipal member earlier this year.

 On Thursday, Nazara Tech said it will issue 2.8 million freshshares to SBI Multicap Fund, 1.6 million shares to SBI Magnum Global Fund, and1.26 million shares to SBI Technology Opportunities Fund.

 The preferential issues, however, are subject to Nazara Techshareholders’ approval.

“This infusion of fresh funds will be utilized to invest infunding requirements…strategic acquisitions and investments in variouscompanies," said a Nazara Tech statement.

 A part of the funds to be raised could be also used for debtrepayments, said Nazara Tech.

 NazaraTech has been one of the best performing stocks since its listing in 2021,gaining over 79% on the listing day and continuing its rising streak since astock split in June last year.

 Since the 1-for-1 stock-split last June, the stock has risen36.3%.

Rekha Jhunjhunwala, wife of late billionaire stock investorRakesh Jhunjhunwala, holds 9.96% in Nazara Tech, which is worth ₹578crore as per Thursday’s closing.