Ahead of Nazara Technologies’ IPO, the CEO says its public listing will put Indian gaming on the world map

• The 22-year old company’s ₹583 crore IPO issue opens tomorrow (March 17) and will close on March 19.
• Business Insider caught up with chief executive officer Manish Agarwal about the company’s growth over the years and why they are bullish about gaming.
• Rakesh Jhunjhunwala-backed Nazara will sell 58.9 lakh shares in the price band of ₹1100-1101 per share.

Indian gaming and sports media company Nazara Technologies is set to open its much awaited initial public offering (IPO) on March 17, as India finally warms up to technology companies heading for the public markets.

The 22-year old company founded by Nitish Mittersain is going for a ₹583 crore IPO issue which opens tomorrow, where the company will sell 58.9 lakh shares.


A few hours ahead of the big milestone for the company, Business Insider caught up with its chief executive officer Manish Agarwal, who admittedly says there’s barely any time to process what’s happening right now.

“Nazara’s IPO is a great contribution to the gaming industry in India. Post our IPO, an Indian gaming company will be tracked publicly from across the world. This will also invite more enquiries about the Indian gaming industry and entrepreneurs,” said Agarwal.

The firm, backed by ace stock market investor Rakesh Jhunjhunwala, had first filed the draft red herring prospectus (DRHP) in January 2018 and had even got approval from SEBI for an IPO. However it didn’t go ahead with the launch because of a market slump.

Nazara holds the licenced mobile gaming rights of popular cartoon characters like Chhota Bheem, Motu Patlu and Shikari Shambhu. It has also established itself in 64 countries across Africa, Middle East, South East Asia, and the Indian subcontinent.

Nazara’s stakeholders

While Mittersain individually also holds a 3.49% stake in the company, Agarwal has a 1.51% stake.

Nazara’s IPO – led by fundamentals

The company has seen its revenue grow sharply in the last few years.


“Between April-September, 2020 we made ₹207 crore – that is equal to 79% of the full year numbers of FY20 and in FY20 we saw 40% growth over FY19. There’s a very strong growth momentum which the businesses are seeing,” said Agarwal.

But for Nazara, the growth hasn’t been a COVID-induced one. Instead, Agarwal said that the company’s right investments and knowledge of consumer trends has brought them here.

“Our growth has been on the back of fundamental consumer trends which we identified in 2017,” he said.

Agarwal cites the example of their e-sports business, which has been growing constantly even before COVID.


Even their gamified e-learning segment which contributes to 39% of their revenue, has gone from making ₹1.2 crore per month on an average in March 2019 to ₹4.5 crore on an average in March 2020.

“In fact, COVID-19 pandemic has dampened our revenues a little bit. Our e-sports business where we create offline experiences online was not possible, our advertising-led businesses like mobile gaming saw advertisers pull back on spends,” he said. The company has also mentioned the same in its risks segment.

Even though real money gaming has garnered a lot of interest with unicorns like Dream11 and players like MPL, Winzo betting big on it, Nazara has stayed away from it. Agarwal said that while the vertical has immense potential, so is the statutory risk which can throw your business away overnight.

“We have a very conservative DNA. In 2019, when the noise around real money gaming had started to increase, with some of the states wanting to ban it, we could see that the coming days will have more grey clouds. We took a call that we won't aggressively invest in the business and we became strategically cautious. Till the time statutory clarity isn’t there and we won’t invest in the business, it has a 3% contribution to our revenue today and it will drop further,” he said.

The company also went on an acquisition spree in its pre-IPO phase. It has pumped in over $50 million into startups in the last two years.

In fact, its acquisition spree even got it a ‘next Tencent’ reference in a news report.

Some of Nazara’s top acquisitions

The big dream – being one of the top 5 global gaming companies in the world

IPO is a huge milestone, but Nazara has more plans for the future. “IPO is a huge milestone in our journey, and the journey is that we want to be in the top 5 global gaming companies. It is a strategic tool for us to achieve that goal,” said Agarwal.

But there are differences in the Indian and global gaming environment. Agarwal explains that globally the gaming industry is led free-to-play games with in-app purchases, where the in-app purchases drive the global money revenue on the non real gaming money side.

“In that, in-app purchases is driven by hardcore games. In India, if there are about 380 million gamers, out of that 300 will not do in-app purchases, it’s a very small segment today where people have an inclination to buy virtual items in a game. The driver of that is competitive multiplayer which needs high quality internet, stable connections. The infrastructure for that is improving in India but is still not there. When you have 200-250 million doing competitive gaming over there mobile networks, that's when you will see monetisation,” he said.

But there’s also hope. For youngsters in India, 14-25 year olds, gaming is becoming the go-to entertainment and that will drive growth. “It’s different from people like us for whom movies were the source of entertainment – that’s a big shift, which makes gaming in India a very attractive market,” he said.

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