Nazara Technologies is expected to raise $142 Mn from IPO, with a valuation of $500 Mn post IPO
• Lead investor WestBridge Capital will make a partial exit, earning 75-80X return on its 12-year-old investment
• The Indian gaming Industry is expected to hit $1.1 Bn by 2020; India sees the second-highest game downloads globally
The Indian startup ecosystem — the third-largest home to startups in the world — is showing signs of maturity, with startups coming of age, providing high-value exits to investors and launching initial public offerings (IPO). While 2017 proved to be a blockbuster year with a record 122 companies raising a staggering $10.85 Bn through IPOs, 2018 is witnessing even greater highs. Overall, H1 18 India IPO activity was at a comparably higher level and saw 90 IPOs raise US$3.9 Bn, driven by solid activity in Q1 18, according to an EY India report.
While, so far, the IPOs have been primarily concentrated in sectors such as insurance, non-banking financial companies (NBFCs), construction, consumer and technology, India’s budding industry — online gaming — is now set to witness its first-ever IPO with Nazara Technologies set to go public later this year.
Nazara Technologies is expected to raise $142 Mn (INR 1000 Cr) from its IPO. While the IPO will shoot up Nazara’s valuation to around $500 Mn, one of the investors, WestBridge Capital, is expected to get a whopping 75-80X return on its partial exit.
Speaking to Inc42, Nazara Technologies managing director Nitish Mittersain says, “The market has grown now. In the last two years, we have witnessed some accelerated growth in the market. And, now going for IPO is, I think, the natural evolution for the company.”
The Mumbai-based company is backed by WestBridge Capital, Turtle Entertainment, and Sequoia Capital.
According to EY India’s IPO Readiness Survey Report, in H1 18, India recorded the highest IPO activity in terms of the number of deals across the globe, accounting for 16% of the total issues.
“This was 27% and 28% higher than 1H17 activity in terms of number of deals and proceeds, respectively, as companies tried to take advantage of the liquidity in the markets on the back of a solid 2017,” says the EY India report.
While Nazara plans to leverage cutting-edge technologies such as artificial intelligence (AI) in its games and deepen its penetration in developing countries, are there any specific plans after the IPO fundraise? Mittersain clarifies, “The company has already set a timeframe and growth plan to follow. We don’t have any pre-IPO or post-IPO plan as such. What we want is to build a large gaming ecosystem and we have been continuously building it organically, internally as well as through multiple investors.”
