ValuePickr Forum

Nazara Technologies

Intro: Nazara was started in 1999 by Nitish Mittersain while he was still in college. He doesnt have any meaningful interest in any other business. He is still involved in the business along with the CEO Manish Agarwal who has been with the company since 2015

I have highlighted my commentary in italics. Some of it is just opinion

In order to understand Nazara its essential that one understands the gaming industry and its potential in India. So in this post you ll read about the gaming industry as much as the business verticals of Nazara

Below chart illustrates the size of the gaming industry

Globally, Mobile gaming is growing faster than console / pc gaming and also forms the largest chunk in terms of revenues. Half of the global population now owns a smartphone, which makes for a massive market of potential mobile gamers; and, unlike PC and console gaming it’s a lot more affordable. It is expected that the number of mobile gamers will continue to grow faster than PC and console gamers as global smartphone penetration increases, and more of those smartphone owners become casual gamers.

The story isn’t very different at home either. Not only is mobile gaming largest in terms of revnue and the fastest growing segment in idnia as compared to PC and Console gaming. This segment was valued at USD 1.2 billion in 2020 and is expected to reach a value of USD 3.1 billion by 2023, growing at a CAGR of 39.6% during this period as compared to the growth rates in China and the US, which stood at 14.6% and 12.2% respectively

Changing Landscape

  • Increase in numbers of gamers due to cheap data & growing mobile penetration

  • Demographic shift (average age of Indian gamer is 24 years old vs 31 & 32 years in USA and china respectively)

Teenagers playing video games in todays India are likely to continue gaming in their 30s.Gaming is not something most people start at the age of 30

  • Increased disposable income along with habit formation(The average annual spend on gaming per individual in India is USD 23, while in USA and China that stands at USD 113 and USD 115 respectively)

A lot of 20 year olds are willing to pay for gaming as they see it as another form of entertainment and are likely to spend more as they older

  • Local games are going mainstream (games like ludo king carrom teen patti have become very popular specially during the lockdown )

  • Social Gaming : Large online Communities are formed around certain popular games. Once a community reaches a critical mass it tends to grow organically (for a game publisher this means new users with minimal Cost of acquisition)

  • Free to play games: Not too long ago most games were played on PC or Console(XBOX,Playstation,etc) Not everyone could afford it.Today you can play for free and that to anywhere anytime on your phone

Whats an In-App Purchasing(IAP) Model? Historically most free mobile Games used to generate revenue via in-game advertisements (ad banner, video ad between 2 levels etc) but this has completely changed in today’s landscape where most free games come with the option to make in-app-purchases. Users can play for free but they have to pay for certain features / items (extra lives, weapons, maps,collectibles, bonus levels etc).These features wont be available to a basic user or if available it ll require a lot of time to procure. In india the mix is still skewed towards advertising model but that’s changing. Globally Some of the most popular games by revenue such as Dota, Fortnite, PubG, are free-to-play.Once a game is launched, incremental costs for content updates are low, meaning incremental revenues from in-app purchases can have a disproportionate effect on the bottomline

Not all gamers are same. There are about 380 million gamers In India. 90% of them do not pay. Even among the ones who pay for in app purchases, most of the revenues come from a small cohort of gamers. The ones willing to pay are unlikely to play 20 different games. They have a tendency to spend long hours playing a select few games. If you are a game publisher who wants to drive revenues through In-App Purchases you want these serious gamers. They can be very loyal. They wanna be part of social gaming community and they dont mind spending. In the Indian context think of what PUBG has been able to establish Pure advertising model works better with casual gamers . Such kind of games don’t live long becausse they are usually very easy and without a little challenge people eventually get bored. However most developers who make such mobile games are aware of it.It still works because its not very expensive making a basic mobile game.

Freemium(free-to-play) games110 mn+ installs across Cricket (WCC1, WCC2, WCC3, Big Bash League, Rivals, Battle of Chepauk), Carrom and TT
WCC is the world’s largest cricket simulation game franchise on mobile.Its also the most downloaded cricked game.( Acquired 52.38% stake in Dec-2017)

Its played for ~47 minutes / day by ~13.25 Mn monthly active users. (The average time on a casual game is just 15 min)
The Game has a very strong following among those who love virtual sports simulation . It gets over 120,000 downloads every day organically without any marketing spends
As you can see the Daily average users(DAU) is stable with a few spikes seen during IPL . The growth is going to come from in app purchases in WCC3. Currently the conversion is at 0.12% . They expect this number to reach 1.0% by FY25. (In app revenues grew by 75% YoY in Q1FY22).
As per management Revenues here were flattish for FY21 because they switched to an IAP model from Advertising model and EBIDTA dipped because of content cost for latest game title WCC3

Sports game titles generally have a longer shelf life. The best example of this is a game franchise called FIFA by EA sports. Even though there have been a lot video games on football over the years FIFA is the one with a cult following.Something like that is happening here.

ESPORTS is video gaming at a competitive level. Millions of viewer watch this around the world just like any other sporting event.The prize money in some of these tournament goes into million of dollars. Its so mainstream now that Its already a part of Asian games 2022 and There’s talks about including eSports in the Olympic Games.

Its a billion dollar market growing at 16.15% CAGR and China is the largest esports market in the world. However the eSports market in India is expected to grow faster than china at a CAGR of 25.1% for the next couple of years.
The eSports ecosystem consists of game publishers, gamers, Media & OTT platforms (Twitch, YouTube, etc.), and eSports companies
eSports companies (Nodwin, Jetsynthesys, Gaming Monk, Gamerji, e-war etc) are the ones that host regular events and tournaments where professional players compete for large prize pool. They provide infrastructure , manage online registrations, provide administrative support and contribute to prize pool. Game publishers are their partners in this. Game Publishers are the ones that provide game titles.For game publishers esports is like a marketing tool. More tournaments means more visibility and more fan engagement. Some game publishers have their own Esports unit. Then u have your professional Gamers who are often part of a Team just like in cricket. Some professional gamers are nothing short of celebrities in the gaming world. Streaming live for hours, these gamers get millions of views on YouTube. Then u have media and OTT platforms who showcase these events .(YouTube,Twitch,Facebook gaming,Hotstar etc). Just like in any other sport Media and OTT companies pay for media rights to broadcast/stream. Now as the popularity of eSports grows, more media companies will want a piece of the action and these media rights will keep getting more expensive. Globally there are tournaments that are filling stadiums bigger than our cricket stadiums. Also as viewership of Esports increase in India , more sponsors will want in. All of this is still at a very nascent stage , with a growing number of casual gamers turning professional, increasing sponsorship from brands and a steady increase in the number of tournaments and cash prize pools.

Nodwin Gaming is the Only company in India to have rights over professional eSports tournament IP’s & content IP’s across regional, national and international eSports.Some IPs are 100% owned by Nodwin while others are shared with game publishers.( Acquired 54% stake in Jan-18)
It has a market share of about 70-80%(measured in terms of the total prize pool)
Its a pioneer and it has strong relationships with global gaming publishers and platforms.It has exclusive partnerships with the biggest names in the industry and manages gaming events such as the ESL India Premiership, KO Fight Nights, etc…
Media rights licensing contributed 49% of Nodwin revenue in Q1FY22 and 55% in FY21.Game publishers formed around 30% and Sponsors 15%
*One of the games which really drove esports popularity in India was PUBG which got *banned last year( Anti-China sentiment). The game is back with a new name and its original korean game publisher Krafton. Recently Krafton invested Rs. 164 crore for ~15% Stake in Nodwin. The influx of funds will be used for the development of esports in three regions – South Asia, Middle East and Africa. Currently there are no offline events because of restriction due to covid but whenever its allowed we can expect Nodwin to host the official event.

It also hosts tournaments for WCC(now sport simulation games based on football or basket ball or cricket form a very small part of esports globally. most of it is games like PUBG DOTA CS etc however sports simulation games is gaining traction and in a country like India where cricket is like a religion i see a strong possibility of a cricket simulation game ,playing a key role in introducing a lot of first viewers to esports and once ppl watch it doesnt feel so weird to them and they actually enjoy it. and more viewership means more sponsors, more game publishers and more money)

ESPORTS MEDIASportskeeda ia leading sport and eSports news destination website with content across WWE, eSports, cricket, soccer and basketball . (Acquired 63.9% stake in June’19. ) It’s the argest eSports news destination in India.
Content on Sportskeeda is primarily sourced from freelance sports journalists in India and overseas.
Sportskeeda generates revenues by displaying advertisements on its website, which are sourced through leading ad-networks and programmatic-demand-channels. (programmatic revenues means that you have an inventory on your platform, you connect it to the various ad networks which see fitment of their advertisers and the users which you have as a publisher on your platform, and they serve ads)
Q1 FY22: 60.54 million MAUs and 121.44 million visits per month

GAMIFIED EARLY LEARNING tries to bring various elements of game play to the learning landscape to make it more entertaining and engaging. USA is the largest contributor to this market and is expected to reach a size of USD 12.6 billion by 2023, growing at a rate of 47% CAGR. The current size of this market in US alone, is more than 2x of Indias entire gaming industry. The Size of opportunity is huge and its at a very nascent stage globally. So far schools in India have not completely adopted the concept of gamification of education as they feel it takes out the seriousness from education

Kiddopia is one of the most popular apps in gamified early learning in USA(Acquired 50.91% Stake in Oct-19) The content for Kiddopia is designed in-house in india while focusing on basic Math, ,Spelling, Colour, Basic Games in alignment with Pre-School and Kindergarten. It caters primarily to children aged between two to 7 years.
There is an initial trial period of seven days, following which one can opt for a monthly or annual subscription plan. Yearly is priced at 59.99 USD. Monthly subscription rates have recently been revised to 7.99 USD from the earlier 6.99 USD per that’s a 15% jump, benefit of which will be seen in the coming months.
It gets 89% revenues from US but its share in US is just 4-5%. Its already active in UK, Australia, Germany, Spain,. Company claims that Right now they are still tinkering in those markets trying to get the find the optimum CAC
Very good trial to activation conversion ratio of 70%. Monthly churn is in a low range between 4% - 7%
When Nazara acquired Kiddopia in 2019 the subscriber base consisted of 115k paying subscribers. That has grown to 320k paying subscribers as of June 2021.This is a 25% increase as compared to June 2020 (257,413). However, compared to March 2021 (340,482) we have seen a 5% decline. That’s due to the impact of Apple’s privacy policy. Apple sometime back launched a new feature because of which now one needs explicit consent to track users on other apps/websites .The result has been that it has reduced the data on the users. User identification for targeted advertising is not possible like it used to be. Kidoppia gets more than 90% users from Ios but this not just a kiddopia problem alone .Their competitors have the same problem. The company believes the majority of this impact has been absorbed.
Although the revenue traction would continue to remain robust one shouldnt expect ebidta margins to go up because they will continue to invest to get higher market share

I would like to see if this growth sustains once preschools re-open .

REAL MONEY AND SKILL GAMING are games were players have a chance to win money based on outcomes of skill or chance. Games such as Dream 11,Online Poker, Rummy, ludo, have gained significant traction in the Indian market in the recent years. Real money skill gaming contributes 80% of the mobile gaming market
Between 2018 and 2020, Online Fantasy Sports (OFS) revenue registered a 9.4x growth. While cricket remains the favourite sport, Indians have started following football, kabaddi, basketball, hockey etc . 50% traffic is from Tier 2 and Tier 3 cities

However this category is fraught with statutory risk and there have been instances of multiple states banning all forms of online real money gaming. Gambling is a state subject in India . Real money gaming Is gambling if the outcome is based on chance. More skill, less chance is legal. Now what is skill and what is chance is subjective and that’s where the whole debate is.
Then theres the issue of taxation. Currently GST is paid on platform fees but there is talk of imposing GST on prize money. Govt has formed a committee to resolve these issues but there isn’t much clarity yet

HALAPLAY is a sports fantasy app where users can form their own teams (cricket,football) and bet real money.( Acquired in Mar’19 -64.7% Stake) They charge a 6-7% Platform Fee based on the total gaming transaction of the user.So as the number of users increase, the prize pools get bigger and so does Halaplay revenues. (It also has Qunami which is a trivia game but I don’t have info on it worth sharing)
Now this segment is just 3% of revenues but they do plan to take this up to 8% of revenues. (Now the problem with that is that nazara as a company looks for profitable growth in all their business vertical. at a an ebidta level but this whole real money skill gaming space is seeing a lot of companies getting massive funding from PE funds.and these companies dont care abt profitable growth right now. so how do u compete with them?).
Nazara feels this segment is very large but they want to avoid huge cash burn for user acquisition till theres some clarity on these statutory issues .Its currently loss making. They have indicated that they might do an acquisition here at some stage.

TELCO SUBSCRIPTION Business is Nazara’s legacy business. Its primarily focused on offering a catalogue of Android and HTML5 games to mass mobile internet users and first-time mobile gamers in emerging markets including India, South Asia, Africa and Middle East. They enter into revenue sharing arrangements with telecom operators.
1,000+ games offerings to mobile users in 58 countries through 52 telecom operators (Revenue from this section contributed 97.91% of revenue from operations as of FY2017 from 113 telecom operators situated in 61 countries).
They are typically offered in a bouquet format, through periodic subscriptions or on a downloadable basis. India business took a big hit once Jio came out with bundled offers
This business has been on a decline for the last 4 years. When u have so many free games why will anyone pay for a game which is inferior in content, So I feel these revenues are expected to decline even though management has guided for flattish revenues. Management is still hopeful and trying to revive this segment. Recently they acquired rights to distribute a library of premium Disney and Star Wars games

revenue mix

Below is segmental break up from DRHP.Looking at consolidated financials doesnt make sense because of acquisitions


  • Real money games are subject to regulatory risks
  • eSports business revenues gets most of its revenues from a few customers and a few games. If some other game gets banned like PUBG did then it can effect revenues
  • CAC may go up for Kiddopia due to Apples privacy update. This is a key monitorable and one will have to see how the company fairs in coming quarters
  • Highly competitive industry with low barriers to entry

THE FRIENDS OF NAZARA network and some thoughts . Gaming is not a winner-take-all business. Every game has a shelf life.Its Best to look at games as movies. An investment in Nazara is essentially a bet on the management being able to capture the opportunities that this fast moving industry presents. Thats finding good acquisition targets and then scaling them like they have done so far. Their various segments - world cup cricket, kiddopia,halaplay,nodwin gaming,sportskeeda have all been acquired in the last 2-4 years. Nazara has a majority stake in all of them but the day to day operations are still run by the original founders of these firms.Now typically you might see this as a bad thing but gaming is a very dynamic and fast moving world where you can get disrupted faster than you can think. A game is popular today and tomorrow its gone. So the idea is to spread your risks by diversifying. This is what the company calls FRIENDS OF NAZARA where they acquire a majority controlling stake in companies where the founders are still interested in running the business. (Companies acquired must have already a proven business model). For the founders of these acquired firms they see understand how nazara can help them scale up their business which is something the management has demonstrated. Plus they too realise how risky gaming is and are happy to take a stake in nazara instead.That way even they de-risk their portfolio. And while doing all of this Nazara will avoid cash burn which is how they have operated so far
Now Real money skill gaming is where the money is in the near term but in the long term this kind of growth has a ceiling.This segment is not inclusive. What I mean by that is not everyone wants to do real money gaming. Plus in my opinion its more fun watching someone play a cricket simulation game than watch someone play rummy, teen patti or fantasy sports. As the Indian market matures you will see IAP model dominating and advertising taking a backseat just like it is globally. When game publishers see that money flowing, they will want to promote their own games via esports.OTT platforms will want the media rights due to increased viewership and just like Ipl, these rights will keep getting more expensive. If this actually plays out them it could be huge for Nazara.
If you wanna value NAzara it cant be a multiple of earnings or EBIDTA because they have clearly stated that they will plough back whatever they make into the business while staying EBDITA positive. In my opinion its best to look at Ev/Sales

Disc: 1% of holding (Will keep adding at regular intervals)


Great write up @GARP_niveshak
I have a few points to add/ask:

This is an interesting thought. Is there any data you could find supporting this, and if so, could you share the source link?

Have you looked at the non-compliances disclosed in the DRHP? Is that a significant concern?

The employee reviews on Glassdoor etc. are very poor:
“Don’t play with your career by joining Nazara”
“Nazara was good Company but not anymore”
“Salaries are delayed month on month basis, it depends on the MD’s moods when to payout salaries”
“Salary delay random on Founder wishes”
“No strategy - hire and fire policy”
“Appraisals will be given once in 2.5 years”
“Hire and fire policy is the mantra at Nazara”
“They just hire people without thinking what job they will be assigned and after few months they are shown door to exit”
(links: here and here)
Employee reviews, given that they are anonymous and undated, cannot be 100% reliable. But Nazara also has 1.83 Cr ‘payable to employees’ (here) which could possibly be delayed salaries (no allegations). In fact, in just-released FY21 AR, this figure is 3.86 Cr (here). Employee issues are a concern for me personally

On valuation, I am not debating on P/E or P/B or other conventional metrics. But payback ratio of Motilal Oswal WCS is an interesting one, especially for companies where the investment thesis is centred around growth. Nazara’s Q1 FY22 profit was 13.5 Cr (annualized=54 Cr)

To justify current mkt cap of around 5000 Cr (based on payback ratio), Nazara has to grow >100% CAGR for next 5 years.

Please share your views on above points, and thank you for such a detailed post.

Disc: not holding


Very detailed and well summarised article to understand Nazara. I have been reading about this company for some time now. I believe their is lot of complexity and uncertainty in this buisness and though the industry is nascent and growing at great pace risk and volatility seems too high. Though i am a great admirer of Manish and Nitish, they share some great insights during concall. As of now i am in watch mode. Thanks.


@GARP_niveshak Thanks for starting it.
I have invested post IPO with the below narratives:

Story and numbers: Revenue 400 cr (actual 454) vs mkt cap 5000
In past (Fy 2016) it has 200+ cr revenue vs 60+ cr profit
Now in 2021 revenue is 400+ cr revenue profit will be 120 cr (actual profit is 9 cr). (The profit is depressed due to changes in the business model.)
Co has 3 cr shares
EPS will be 120 cr / 3 cr = 40 is EPS
Such co may get PE of 50;
PE (50) = Share Price/EPS (40) hence share price will be 50*40 = 2000

Is this the right consideration?

Am also struggling to find an answer:
80% + revenue coming from Early learning and esports (40% each).

  1. Why did the standalone alone business become less significant?
  2. Should we value nazara as a holding company?

Disc: 1% of PF. Not added recently.


Nazara’s telecom business division which used to contribute high in revenues few years ago is stagnant now. They used to develop games for Telecom Service Providers like Airtel, Idea and these service providers used to generate revenues from these small games when their subscribers used to play these games. Due to Jio’s 4G entry the userbase who was only playing these mini games shifted to big games and their contribution to Nazara also fell down in India. Now Nazara only gets business from the Service Providers based out of Africa and ME and its revenue contribution has come down as other business which Nazara acquired started generating good revenue.

A key driver will be to see what acquisitions Nazara do in next few years and what revenue they contribute. Esports division will be a significant booster if it grows as Management is guiding.

Disc: Tracking closely


Excellent … very educative . Good to read for a presepctive on Indian and Global gaming industries . Thanks .

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I think they mentioned this in a con-call but it’s something I have known all along. I am an avid gamer myself. I am sure if you try you ll find something on this online. FYI, Game publishers segregate gamers as - casual, midcore and hardcore gamers. Before making any game they know their target audience. Midcore and hardcore gamers are unlikely to play games that appeal to casual gamers and vice versa. There will always be some games that everyone loves but as a game publisher you need to know your audience. So to answer your question yes I am certain game developers know that hardcore gamers spend most of their time on a select few games ( 2-3 games)
Glassdoor reviews are by employees who aren’t happy. Happy employees rarely write reviews. There’s a saying - good reviews are fake and poor reviews real. That’s just the nature of ratings and reviews.
As per matching principle any expense should be recorded in the same period the revenue has been earned. However as you know the balance sheet is on a particular date and it’s possible that on that date the company still owes creditors,lenders, employees money. So if the balance sheet has been prepared on 31st March(which is the caser) and company intends to pay employees on 1st April it will be recorded as a current liability as on 31st(employee benefit payables or payable to employees) Also a lot of companies pay bonuses which is again a part of employee expense incurred during the last fiscal and if not paid on 31st March(which is usually the case) sits on your books as a liability
Earnings will be suppressed. Management has already said that they are not looking at near term profitability. Look at Q1 margins for kiddopia. It improved because they didn’t spend on marketing and that helped boost earnings But Is that something you want? Wouldn’t you rather they spend on marketing an cement their position in gamified early learning? That’s why I look at EV/ SALES. It’s true that at some future date they we will have to look at earnings but not right now
Hope i have answered all your questions. Please let me know if there’s something else:)


It’s best to look at EV/ SALES right now. Projecting earnings at this stage is futile because you don’t know what acquisition they are going to do next.
Best to See how much they pay for these future acquisitions and how much value they create out of it. So far they have done a good job at acquiring and scaling up. Let’s see how this story pans out

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Great explanation.

That is a valid point, but won’t that be a one-off scenario? Payable to employees has been >1.8 Cr every year- FY18, 19, 20, 21 (source: here and here)

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Please check Page 198 of last annual report

I am positively amazed by the extent of indepth article you have written on just a 1% holding…would only imagine the quality of company and extent of research on your 5, 10 or more percent holdings!!

I am half way through the above post as I am slowly reading and absorbing the content…

When I think of Nazara, the first few things which come to mind are below and would be really great to get your thoughts on them as well -

  1. A 20 plus years company and only 5k crore mcap in a huge global industry…when Indian IT did it in software, why couldn’t any indian company like nazara do the same success in gaming as it is after all software and digitally driven…here I am not referring to only indian market as addressable market but rather global…

  2. Say if I own Jio and I see your presentation above, I can sense the huge opportunity in gaming globally…it dwarfs music plus bollywood+Hollywood by a big margin. I would target to be a king of games, the way I disrupt every segment with huge runway…even an Amazon for that matter or Microsoft/Google…why are no such names a big name in gaming…at least globally…and in India what stops Jio or any big digital company to become formidable competetor or even acquire nazara down the line…the way Just dial story ended…

  3. Gaming is globally already a huge industry…so nazara would be competing eventually with some global giants…who would also want a big piece of cake of Indian Market…how would nazara ensure it wins…

Point is, industry is great, future is great…but among no other available options in listed space or even in India yet…are we getting a great company to invest?

Disc. Tracking position of approx 0.5% of portfolio. Want to learn more about the company and industry.


I have heard this a few times (I think it was asked in the conference call also), but didn’t really understand. Could someone please explain, in simple layman language, what is Apple’s privacy policy update and how it is related to Kiddopia? Thank you.

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Being an iPhone user, I have a choice now to allow or dis-allow apps on my phone to track my activities outside the app … ie I can disallow Facebook from tracking my search activity on google. This obviously impacts the adds shown on Facebook to me - they will not be very relevant to me as compared to past. Given this change, I am assuming companies who spend on advertising as well as companies who are business of advertising- have to understand the change and plan around it.


Source: Telegram Channel ‘Beat the Street’.

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So many reasons. some that come to mind are- India had enough talent for IT to take off. Not the case with gaming. Even today theres dearth of talent. For you to create games you have to be interested in gaming. Even if you are interested in making games where do you go and learn to do that? Today there are students who are learning to develop games and a lot of them got introduced to games due to mobile games or xbox/ps. How many of us spent our entire day playing video games? Thinking on those lines you ll see that a lot of things have to happen, for everything to fall in place

Big names are in Gaming. Jio,Paytm,Tencent,Microsoft,Google are taking gaming seriously. Its possible that Nazara gets acquired.
It is a very competitive environment no doubt but Capital alone doesnt ensure success here. Making a game is a lot like making a movie.You can have all the money in the world but it doesnt ensure success at the box office. I have seen my share of high budget flop films.
A bet on Nazara is a bet on the management.

Thank you! The idea is to keep it as short as possible without omitting too much. Nazara is a 2% holding now


good insights


First of all thanks @GARP_niveshak for your extensive coverage in this thread as well as your video in youtube on this topic. I also found the below analysis from Prabhudas Lilladher very useful. Most of the screen-shots I used in this analysis are from the below pdf from PL.

Here is my analysis of Nazara Technologies

Gaming Theme
Nazara technologies is a gaming company is started in 1999 by Nitish Mittersain.
It is one of the early movers in the nascent gaming industry in India and it understood the economics of gaming industry from early 2000s.Their tie-ups with Telcos across different geographies in its early days and able to withstand in this highly disrupted industry is worth mentioning.Nazara is a big contributor to the gaming ecosystem in India with its presence across different business segments.

Gaming is a highly disruptive industry and the revenues can suddenly perish. The management understands this and started building the “Friends of Nazara” network from 2015.
This way it mitigates the risk of disruption in single games by diversifying into multiple games which are run by its respective owners/creators. This is similar to the Airbnb business model but not completely asset light as Nazara has a majority stake in each of the network companies.

From what I understand, Nazara majorly intends to position itself as a platform for

  • Game publishers(developers) to scaling up their revenues/downloads – Ex – Paper Boat Apps(Kiddopia), OpenPlay etc
  • High profile gamers in Esports contests via Nodwin Games & Esports followers via SportsKeeda website


  1. Sunrise sector - Early mover advantage & Low penetration in India

  2. Listing benefits and also scarcity premium as it is the only gaming company listed in India

  3. Games are addictive and the revenue can be huge if there are multiple successful games like Kiddopia. The room for margin expansion is too huge

  4. Scalable & network moat in some of the segments – Esports, Sportskeeda

  5. Nodwin gaming(subsidiary) which conducts Esports has prominent shareholders including the likes of PUBG owners(Krafton)

  6. Ability to scale up quickly. This is one of their key success criteria for their business model. As long as it works, Nazara will be on the path of growth trajectory

  7. Localised gaming experience – the company has trademarks for super hero characters like chota bheem etc which are very much in demand


  1. Less promoter holding – Prone to takeover

  2. Equity dilution as Nazara is actively looking for inorganic growth

  3. Highly disruptive industry – Also includes big local players like BYJUs,Vedantu,Unacademy as competitors in some segments(gamified early learning) and many international players, some of which are not subscription based

  4. Global competition and with Covid, more digital penetration is being witnessed from big fishes with deep pockets who were traditionally into land based casino businesses

  5. The success criteria is majorly defined by how to hold multiple partners together. There are many lose ends here

  6. Regulatory hurdles & litigations possible especially with real money games & freemium(social casino) games

  7. You cannot value this company using traditional metrics as their business model is kind of dependent on inorganic growth and how efficiently they can scale up

The game actually started changing into a fast lane after the advent of new CEO Manish Agarwal(IIM Ahmedabad) in 2015, who is also into gaming industry.

As part of their growth plans, they approached Rakesh Jhunjhunwala in 2018 and secured 180 Cr funding for ~11 percent holding
Nice video on how & why Mr. Jhunjhunwala invested in Nazara How did Nazara Tech Get Rakesh Jhunjhunwala To Invest In A Startup? | Startup Central - YouTube
To further expand their growth ambitions, they listed the company in 2021 however, they did not dilute their equity which means they are not interested in further equity dilution

I will be tracking the below activities to decide my position size in Nazara

  1. Acquisitions
  2. Stock holding pattern of Mr. Jhunjhunwala & the promoter as they will be the first people to know about visibility of hyper growth if any

Disclosure – Invested 1% of portfolio. Closely tracking


Advantage to Nazara

Discl - Invested 3% of portfolio