Mobile gaming and sports media company Nazara Technologies on Wednesday said it is setting aside about Rs 830 crore, or $100 million, for mergers and acquisitions in markets like India, Europe and North America.
The investments will be made in larger cheque sizes ranging between Rs 100 crore to Rs 250 crore, and Nazara will either pick majority stakes in the target entities or invest with a clear path to majority holding, Nitish Mittersain, joint managing director and chief executive of Nazara Technologies, told ET in an interaction.
“We will strictly remain a strategic investor and not pick smaller stakes in firms,” he said.
He said Nazara is in advanced talks with two to three firms in the North American market in the game publishing sector without giving further details.
In India, the firm is looking to acquire real money gaming (RMG) firms and is in advanced talks with some, Mittersain said.
He said the company has a total cash position of Rs 1,500 crore, including funds from its various subsidiaries, from which it is earmarking this amount for buyouts.
Over the past few months, Nazara has raised Rs 760 crore from a slew of investors like Zerodha cofounder Nikhil Kamath, SBI Mutual Fund, ICICI Prudential Mutual Fund and Plutus Wealth Management.
Nazara is targeting larger, mature businesses with strong revenues and profits for its investments, either in the game publishing sector or in adjacent sectors with robust intellectual properties (IPs), Mittersain said.
The firms should have a solid user base in North American markets, and ideally have users in markets like India too, he said. “North America is important to us as a scale-up market where we can drive monetisation, whereas India will be an important strategic market where we will take more long-term and smaller bets,” he said.
Besides game publishing, Nazara will also look to make investments in sectors like gamified learning where it already has properties like Kiddopia, Mittersain said.
The firm is aiming to close its first deal from this set of investment in the April to June quarter, he added.
Mittersain said Nazara will only invest in RMG firms in India, and focus on non-RMG, casual to mid-core games in other markets.
“We believe the GST change offers regulatory clarification for investment in the (RMG) sector… There is an overhang of retrospective taxation, but our exposure is currently very small, and we will be closely watching developments on that front before investing,” he said.
The RMG sector was hit by a 28% goods and services tax (GST) in October last year, and a number of firms including large ones like Dream11 and Gameskraft are currently fighting pending tax notices issued late last year.
Nazara will also see its subsidiaries like Nodwin and Sportskeeda drive smaller investments, Mittersain said.
Esports and media firm Nodwin, which was also the largest driver of revenue for Nazara for the December quarter, acquired events firm Comic Con India and Istanbul-based esports and gaming firm Ninja Global FZCO among others this year.
Nazara had also launched a game publishing arm called Nazara Publishing in October last year, through which it is looking to invest at least Rs 1 crore each in up to 20 games over the next year or so.
Source: Economic Times