GIC, Plutus bet more on Nazara at higher price but still sitting on neat upside

 GIC, Plutus bet more on Nazara at higher price but still sitting on neat upside

Singapore sovereign wealth fund GIC Pte Ltd and Indian asset manager Plutus Wealth Management LLP have increased their stake in gaming company Nazara Technologies Ltd.

Nazara has issued 1.43 million shares on a preferential basis to GIC and Plutus at Rs 2,206 apiece, raising a total of Rs 315.3 crore ($42 million), the Mumbai-listed company said in a stock-exchange filing.

A GIC affiliate invested Rs 259.8 crore ($34.75 million) for a 3.62% stake. Previously, GIC held a 1.2% stake in Nazara as of June 30, stock-exchange data show. Plutus invested Rs 55.5 crore, taking its stake to 6.92% from 6.57%.

Both the investors bought the shares at a sharply higher price than their original investments earlier this year as Nazara shares have more than doubled since its initial public offering in March.

GIC had first invested in Nazara as an anchor investor ahead of the IPO at Rs 1,101 apiece. Plutus would have paid an even lower price as it had bought Nazara shares from private equity firm WestBridge Capital more than two months before the IPO. Ahmedabad-based Plutus, which says it invests in equity and equity-related instruments of high-growth companies, had bought shares worth Rs 500 crore from WestBridge.

Still, both the investors are sitting on a neat upside on their fresh investments. This is because the allotment price for the new shares is almost a fifth lower than Nazara’s closing price of Rs 2,630.8 apiece on the BSE on Wednesday.

Nazara shares climbed further on Thursday, inching up almost 3% in morning trade to Rs 2,704 apiece. This gives the company a market capitalisation of Rs 8,238 crore. This is far higher than the valuation of Rs 3,352 crore it sought in the IPO that made it India’s first gaming technology company to list on the stock exchanges.

Nazara hadn’t raised any fresh capital in the IPO, which was entirely a secondary market sale of 5.29 million shares to provide a partial exit to its early- and late-stage investors. The IPO size was Rs 582 crore.

The company said it will use the fresh funds raised from GIC and Plutus for growth initiatives and to pursue strategic acquisitions in various business verticals including gamified learning, skill-based real-money gaming, and esports.

Sumit Upadhyaya

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