Rakesh Jhunjhunwala Makes History On Indian Stock Exchanges

Indian business magnate and billionaire Rakesh Jhunjhunwala has broken new ground on the country’s stock exchanges with the listing of his gaming firm Nazara Technologies. The Jhunjhunwala-backed Nazara made history in India with its initial public offering (IPO) by becoming the first gaming firm to ever list on Indian stock exchanges.

The idea behind the IPO is to raise the company’s profile, both in India and on the global stage. The hope is that this increased exposure will lead to more investment opportunities from all over the world. “Having a gaming IPO opens a lot of investor interest in this space. India is still under-penetrated from a gaming point of view. Knowing there is a listed stock that can be tracked across the world augurs well for the gaming industry,” said the chief executive of Nazara Technologies, Manish Agarwal.

Who is Rakesh Jhunjhunwala?

Jhunjhunwala grew up as part of a Marwadi Family in the suburbs of Mumbai. His father worked as commissioner of income tax for Bombay, and he attended Sydenham College of Commerce and Economics before enrolling at the Institute of Chartered Accountants of India.

As of January this year, Jhunjhunwala was ranked as the 38th richest person in India, with an estimated net worth of over $3.3-billion. He is known colloquially as the “Warren Buffet of India” and the “King of Bull Market”.

Importantly, he knows a good deal when he sees one, and the online gaming space is an exciting industry right now. According to a report published on Business World, India is set to become an industry leader in global online gaming culture soon.

By the end of this year, the gaming industry is projected to hit the $50-billion mark for revenue, with online gambling and internet casinos being one of the largest sectors of this rapidly growing industry. The growth is not expected to slow down any time soon either, with predictions indicating there could be as many as 650 million Indian internet users by 2023.

Everything You Need To Know About The Nazara Tech IPO

Through the IPO, it has emerged that Nazara Tech is not only the first Indian online gaming platform to be listed on local stock exchanges. It is also the country’s only gaming firm with a presence in both emerging and developed markets simultaneously, such as Africa and North America.

Gaming is at the heart of everything Nazara does with the company’s offering, including traditional gaming, interactive games, competitive esports, online gambling, iGaming, and a learning ecosystem for children driven by gamification to make it as fun and engaging as possible.

The IPO began on 17 March and closed on 19 March. The initial face value of shares was Rs4, with about 529 million shares issued. The maximum issue size was set at Rs 583 crore with a minimum bid of three shares. The company was listed on both the BSE and NSE.

How Nazara Makes Money

Nazara makes most of its income through gamified e-learning, with around 40% of its revenue coming in from this vertical. Second is esports contributing almost 32% of revenue, followed by Telco subscriptions (21%), freemium games (4.5%).

With real money games bringing in just 3.1% revenue by the start of 2021, it is clear there is enormous room for growth in this area. Due to global market trends, there are some fears the company may not be able to effectively monetize the esports vertical to the full potential many believes the industry possesses; this should more than be made up for by planned gains in the iGaming space.

Nazara has an encouragingly diversified portfolio already, with its share of the revenue from India (around 41%) already being matched by the contribution from North America. It is very impressive considering that the region only contributed about 12% of revenue 12 months ago before the shrewd acquisition of children’s learning application Kiddopia in July 2020.