The firm’s total cash position stands at Rs 1,500 crore, including funds from its various subsidiaries, from which it is earmarking this amount for buyouts, managing director and chief executive Nitish Mittersain told ET in an interaction.
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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.
The investments will be made in larger cheque sizes ranging between Rs 100 to 250 crore, and Nazara will either pick majority stakes in the target entities or invest with a clear path to majority holding, Mittersain said. “We will strictly remain a strategic investor and not pick smaller stakes in firms.”
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). The firms should have a solid user base in North American markets, and ideally have users in markets like India too, Mittersain 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 added.
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The firm is in advanced talks with two to three firms in North America in the game publishing sector, Mittersain said, without giving further details. It will also look to invest in other sectors like gamified learning, where it already has properties like Kiddopia. Nazara is aiming to close its first deal from this set of investment in the April-June quarter.In India, the firm is also looking to acquire real money gaming (RMG) firms and is in advanced talks with some, Mittersain said. “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 added.
Nazara will only invest in RMG firms in India, and focus on non-RMG, casual to mid-core games in other markets.
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 by the GST department against them 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 company’s largest revenue driver for the December quarter, acquired events firm Comic Con India and Istanbul-based esports and gaming firm Ninja Global FZCO this year.
The company 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.