Listed gaming firm Nazara Technology’s board, in a meeting held on Wednesday, approved the issuance of 1.43 million shares to Singapore sovereign wealth fund GIC Pte Ltd and Indian asset manager Plutus Wealth Management LLP.
The transaction is subject to a shareholders’ approval, the company said in a stock-exchange filing.
Existing backers GIC and Plutus Wealth will receive the shares on a preferential basis at Rs 2,206 apiece, investing a total of Rs 315.3 crore ($42 million).
GIC will invest Rs 259.8 crore ($34.75 million), increasing its stake to 4.82% from 1.2%. Plutus will invest Rs 55.5 crore, taking its stake to 6.92% from 6.57%.
GIC had earlier participated as an anchor investor in the IPO during the month of March. At the time, it had invested Rs 22 crore at Rs 1,101 apiece.
In January, Ahmedabad-based Plutus Wealth Management bought shares worth Rs 500 crore to provide a complete exit to WestBridge, investor since 2005.
Plutus’ stake acquisition must have been at an even lower price than the IPO pricing.
Nazara’s shares have more than doubled since the time of its listing. The existing investors are sitting on neat returns. The shares being issued now hold a lock-in period of one year from the date of issuance.
The Rakesh Jhunjhunwala-backed firm’s shares opened at Rs 2,668 apiece on Thursday, which is still about 17.3% higher than the issue price of the offering.
The company’s IPO was an entire secondary offering of 5.29 million shares to provide a partial exit to early and late-stage investors. The IPO size was Rs 582 crore.
The proceeds from the current preference issue will be used for growth initiatives and to pursue strategic acquisitions in various business verticals including gamified learning, skill-based real-money gaming, and e-sports.
Additionally, the board of the company also approved the issuance of 0.65 million shares at Rs 2,206 apiece to Unnati Management Consultants LLP for the acquisition of balance 76.7% stake of OpenPlay Technologies pursuant to the acquisition agreement dated August 27, 2021.