Zerodha, SBI MF To Back Jhunjhunwala-Backed Gaming Firm, Will Invest Rs 510 Crore; Stock Nears 52-Week High

Rekha Jhunjhunwala after her late husband Rakesh who was known as India's Warren Buffet, holds a 9.96% stake in a digital gaming firm, Nazara Technologies. The tech player is in the limelight as renowned investors like Kamath brothers-backed Zerodha and SBI Mutual Fund have shown likeness for the company and hence will be investing a whopping Rs 510 crore. Nazara will utilise the funds for growth objectives and that has investors cheerful in this smallcap stock. On Friday, Nazara shares rallied over 3% and are nearing to its 52-week high.

The stock crossed its critical Rs 900 mark to touch an intraday high of Rs 916.10 apiece in the opening bell. This is just a couple of rupees away from its 52-week high of Rs 927.25 apiece on BSE. So far in the day, the stock's upside is around 4.4%. But notably, the stock has zoomed by over 90% from its 52-week low of Rs 481.95 apiece on BSE.

At the time of writing, Nazara shares traded at Rs 906.90 apiece up by 3.40% on BSE.

On the previous day, Nazara shares stood at Rs 877.10 apiece on BSE.

As per the regulatory filing, Nazara has received the board of directors' approval for issuing preferential shares to Kamath brothers-backed firms and SBI MF-backed funds. The preferential shares will be to the tune of 71,42,856 equity shares at Rs 714 per share including a premium of Rs 710 per share.

The preferential shares issuance is worth Rs 509.99 crore.

Of the total, SBI Mutual Fund will infuse Rs 410 crore into the company.

Nazara will be issuing 57,42,296 equity shares at Rs 714 per share aggregating to Rs 409.99 crore to SBI MF by way of preferential issue on a private placement basis. The funds will be invested via three schemes of SBI Mutual Fund namely SBI Multicap Fund, SBI Magnum Global Fund and SBI Technology Opportunities Fund.

Nitish Mittersain, CEO of Nazara Technologies, remarked "Making India the gaming nation of the world has been a long-pursued dream for all of us at Nazara. India's largest domestic
mutual fund investing in Nazara is an important milestone for us in this two-decade-long journey. We are very excited to welcome SBI Mutual Fund as our investor."

While the chairman and MD, Vikash Mittersain added, " 'Highly respected investors backing Nazara makes me very proud of what we have built and I would like to extend a hearty welcome to SBI Mutual Fund"

Nazara plans to utilise the infusion of fresh funds to invest in funding requirements and growth objectives of the company including making strategic acquisitions and investments in various companies/body corporates/ entities/gaming funds, meeting growth. Also, a portion of funds could be utilised for meeting growth and funding requirements in subsidiaries, joint ventures, and associates.

Further, a portion of funds could be used for meeting capital expenditures and working capital requirements and repayment of debt obligations of the company and its subsidiaries from time to time if any.

Meanwhile, Nazara will issue 7,00,280 each to Kamath Associates and NKSquared, which are partnership firms represented by its partners Nikhil Kamath & Nithin Kamath.

Axis Capital advisors to the company for this transaction.

As of June 30, 2023, Rekha Rakesh Jhunjhunwala holds 65,88,620 equity shares or 9.96% in Nazara Tech. She is currently among the largest public shareholders in Nazara. As per Trendlyne, her shareholding is currently valued at over Rs 578 crore.