Nazara Technologies shares were in high demand in the ongoing share sale via initial public offering (IPO). The Rakesh Jhunjhunwala-backed gaming company’s Rs 582.91 crore IPO was oversubscribed within hours of opening. The IPO was subscribed 1.28 times till 12:20 pm, data from the National Stock Exchange showed. Retail investors were seen participating in huge numbers as the portion reserved for them was subscribed over three times. While portion reserved for non-institutional investors subscribed 12 per cent.
Nazara Technologies is the country’s first gaming company to get listed on the stock exchanges and the company is selling shares in the price band of Rs 1,100-1,101 per share.
The initial public offering will be an offer for sale (OFS) by existing shareholders and there will not be any fresh issue of shares. The promoters and existing investors are offering 5.29 million shares, or 16.7 per cent stake and will be able to rake in Rs 582.91 crore at the higher end of the price band.
Bids can be made for a minimum one lot of 13 equity shares and in multiples, extending up to 13 lots; translating into a minimum investment of Rs 14,313 per person.
Domestic brokerage firm Motilal Oswal has a subscribe rating on the stock.
“We like Nazara given its leadership in highly under-penetrated mobile gaming, wide product portfolio and strong relationship and network. Nazara is expected to witness strong growth for next 2-3 years given its recent acquisitions and first mover advantage,” Motilal Oswal said in a note to its clients.
“The issue is valued at 5.5 times FY21 price to book value and 7.6 times FY21 enterprise value to sales on an annualized and post issue basis. The issue is first of its kind listing and has no peer comparison in India. We believe that the market would like to give premium valuation to emerging growth stories like mobile gaming. We recommend Subscribe,” Motilal Oswal added.