Mobile game developer Nazara Technologies Pvt. Ltd is preparing to float an initial public offering by the end of this financial year at an ambitious valuation of around $500 million, a few persons familiar with the development told VCCircle.
Nazara would become the first Indian gaming firm to tap the public market if its plan materialises.
In November 2016, VCCircle had first reported about the Mumbai-based gaming company’s public market listing plans.
Citing unnamed persons, The Economic Times on Monday reported that Nazara would offload stake worth Rs 1,000 crore through its IPO.
The company has mandated ICICI Securities and Edelweiss Financial Services for the IPO.
Nazara plans to complete the listing process by end of March 2018 and is expecting a valuation of 30-35 times the projected profit after tax of Rs 100 crore for FY19, the report said.
Established in 1999 by Nitish Mittersain, Nazara grew after the dot-com bust in 2003 and raised $3 million from WestBridge Capital. WestBridge owns a majority stake in the firm after factoring in the convertible preference shares it holds, as per VCCEdge, the data research platform of News Corp VCCircle.
The company has expanded to over 74 countries over the last decade.
It has been profitable since 2007.
The IPO is expected to give WestBridge impressive returns on its 12-year-old investment in the gaming firm.
Last year, WestBridge Capital managing director Sandeep Singhal had told VCCircle, “Nazara is the dominant player in mobile gaming and is growing both its top-line and bottom-line. We are happy shareholders.”
In 2014, the firm had floated a Rs 10 crore seed fund to invest in gaming firms.
This April, Nazara invested an undisclosed amount in London-based mobile games studio TrulySocial. London Venture Partners and Drussila Hollanda-Grönberg, game lead at Finnish gaming company Supercell, also took part in the funding round. The investment was part of Nazara’s strategy to help foreign gaming firms enter the Indian market.
It had also picked 26% stake in London-based mobile gaming studio Mastermind Sports Ltd, which launched CricBet, a real-time prediction game.
A report titled ‘Mobile Gaming on the Rise in India’ published by NASSCOM Gaming Forum and San Francisco analyst firm App Annie stated that mobile game downloads in India are expected to grow at a CAGR of 58% over the next five years, going from 1.6 billion downloads in 2016 to an estimated 5.3 billion downloads in 2020. This would be led by the growing adoption of games, the rapid proliferation of smartphones, affordable data and universal implementation of direct carrier billing, the report stated.