Gaming and media firm Nazara Technologies said it is raising ₹410 crore from SBI Mutual Fund.
The company’s board approved the issue of 57.4 lakh equity shares (57,42,296 equity shares) for ₹714 per share to SBI Mutual Fund, by way of preferential issue on a private placement basis.
The funds will be invested via three schemes of SBI Mutual Fund — SBI Multicap Fund, SBI Magnum Global Fund, and SBI Technology Opportunities Fund.
Stakeholding pattern
SBI Multicap Fund will be investing about ₹200 crore for a 3.82 per cent stake, while SBI Magnum Global Fund is investing about ₹120 crore for a 2.29 per cent stake and SBI Technology Opportunities Fund is investing the remaining ₹90 crore in return for 1.72 per cent stake.
Overall, SBI Mutual Funds will own a 7.83 per cent stake in Nazara Technologies. This comes just days after a ₹100-crore capital infusion by Zerodha co-founder Nikhil Kamath. This investment, along with Kamath’s investment on Monday, was part of a combined preferential issue worth ₹510 crore, said the company.
On July 10, its board of directors approved raising up to ₹750 crore through an issuance of equity shares. The company will use the capital for more strategic investments, said Nazara chief executive Nitish Mittersain.
“In a dynamic business like gaming, raising capital through debt in my view is a dangerous play, because if going is good, everything will be good. But if things for any reason are difficult, the companies get into trouble for taking large amounts of debt,” he said in an interaction with businessline.
He said that overall the dilution for this fund-raise is about 10 per cent. “I think that the value we create with the capital will be more than the cost of dilution for the shareholders,” he added.
In terms of acquisitions, the company is looking at gaming studios with gaming IPs, and virtual reality studios. It is also looking to double down in the eSports segment.
On Thursday, the company’s shares closed 0.45 per cent lower at ₹878.25 on the Bombay Stock Exchange.