Zerodha CEO Set to Level Up, Nikhil Kamath Eyes Nazara Technologies with 3.5 percent Stake
Indian Gaming Industry's Meteoric Rise, Zerodha CEO Dives Deeper into Nazara
1 September 2023
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Kunal Tyagi
Nikhil Kamath, CEO of Zerodha, plans to acquire an additional 3.5% stake in Nazara Technologies, a leading Indian gaming platform.
The Indian gaming industry is poised for exceptional growth, with projections indicating it will reach $5 billion by 2025, growing at a CAGR of 28-30%.
Nazara Technologies has been diversifying its portfolio, recently investing in Snax Games Ltd and reporting strong financial performance with a 31% YoY increase in PAT and a 14% YoY growth in revenue for Q1 of the current fiscal year.
The Indian gaming industry is witnessing unprecedented growth, and amidst this surge, Nikhil Kamath, the co-founder and CEO of Zerodha, one of India's leading stockbrokers, is reportedly making strategic moves. According to sources cited by CNBC-TV18, Kamath is set to acquire an additional 3.5% stake in the homegrown gaming platform Nazara Technologies, albeit in his personal capacity. This move comes after Kamath already secured a 1% stake in the mobile gaming giant. Although the deal is expected to close soon, Nazara Technologies has declined to comment on the speculations surrounding this acquisition.
The timing of this investment couldn't be more opportune, given the astounding growth projections for the Indian gaming market. It is estimated that the industry will expand from $2.8 billion in 2022 to a staggering $5 billion by 2025, boasting an impressive compound annual growth rate (CAGR) of 28-30%. Nazara Technologies appears poised to leverage this growth potential, as the company is set to convene a shareholders meeting on September 4, possibly to discuss raising funds through the issuance of equity shares on a preferential basis.
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Notably, Nazara Technologies has been actively expanding its portfolio. Just last month, the company invested approximately Rs 4.15 crore through its subsidiary, Nazara PTE Ltd, in Snax Games Ltd, an Israeli game developer. This diversification strategy seems to be paying off, as the company reported a robust financial performance in the first quarter of the current fiscal year. Their profit after tax (PAT) soared by 31% YoY to reach Rs 20.9 crore, while revenue grew by 14% YoY, totaling Rs 254.4 crore. Additionally, their EBITDA increased by 10% YoY to reach Rs 33.1 crore for the quarter ending June 30.
Nazara Technologies' success can be attributed to its extensive offerings across various gaming and media segments. These include popular mobile games like World Cricket Championship (WCC), gamified early learning platforms such as Kiddopia and Wildworks, eSports ventures like Nodwin, PublishMe, and Sportskeeda, as well as skill-based, fantasy, and trivia games like OpenPlay, Halaplay, and Qunami, among others. Furthermore, the company has ventured into the digital ad-tech domain with Datawrkz.
Nikhil Kamath's investment in Nazara Technologies is not his first foray into the world of startups and businesses. He has invested in 13 rounds across diverse industries, with recent investments including Mainstreet, Licious, Third Wave Coffee Roasters, and Nas Academy. His investment portfolio spans both Indian and American companies, reflecting his keen interest in fostering entrepreneurial growth.
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