Shares of Nazara Technologies , a prominent player in the Indian gaming industry, experienced a significant downturn on Wednesday, falling 12.8% to ₹1,219.40. This sharp decline came in the wake of the Lok Sabha passing the Promotion and Regulation of Online Gaming Bill, which effectively bans real money gaming in India.

Impact of the Gaming Bill

The newly passed bill aims to prohibit the offering, operating, and promoting of online money games, with the primary objective of safeguarding individuals from potential adverse impacts. This legislative move has sent ripples through the gaming industry, particularly affecting companies with stakes in real money gaming ventures.

Nazara's Exposure and Clarification

Nazara Technologies, while not directly involved in real money gaming, finds itself in a precarious position due to its substantial investment in PokerBaazi. The company holds a 46.07% stake in PokerBaazi through Moonshine Technologies, representing an investment of ₹1,060.00 crore.

In response to market concerns, Nazara issued a clarification to the stock exchanges, stating:

1. The company has no direct exposure to real money gaming (RMG) businesses.
2. As per the latest reported financials, the contribution to Revenues and EBITDA from RMG business is nil.
3. Nazara's only indirect exposure to RMG is through its 46.07% stake in Moonshine Technologies Private Limited (PokerBaazi).
4. Since Nazara does not hold a majority stake or exercise control in Moonshine, its revenue is not consolidated in the company's financial statements and has no impact on reported Revenue or EBITDA.
5. The contribution to PAT by Moonshine as share of profit & loss by associate was negative in the latest reported quarter.

Investment Details

Nazara disclosed that it has invested ₹805.00 crore towards equity shares in Moonshine through a combination of cash and stock. Additionally, the company holds compulsory convertible shares amounting to ₹255.00 crore.

Market Performance

The news had a significant impact on Nazara's stock performance, making it the top loser on the Nifty Microcap 250 index for the day. The sharp decline reflects investor concerns about the potential implications of the new gaming regulations on the company's future prospects.

Looking Ahead

While Nazara maintains that it does not anticipate any material adverse impact on its operating financial performance (Revenue or EBITDA) due to these developments, the market reaction suggests that investors are cautious about the indirect exposure through PokerBaazi.

As the gaming industry adapts to this new regulatory landscape, companies like Nazara Technologies will need to navigate carefully, potentially reassessing their investment strategies in the real money gaming sector.

Nazara Technologies , a leading gaming and sports media company, has reported robust financial results for the first quarter of fiscal year 2026, demonstrating significant growth across key metrics.

Strong Financial Performance

The company's Q1 FY26 revenue surged by 99% year-on-year to ₹498.80 crore, while EBITDA grew by 90% to ₹47.40 crore. The core gaming business delivered a healthy 24.4% EBITDA margin. Profit After Tax (PAT) from continued operations stood at ₹36.40 crore, with overall PAT reaching ₹51.30 crore, marking a substantial 118% year-on-year increase.

Strategic Deconsolidation of Nodwin Gaming

Nazara announced the strategic deconsolidation of Nodwin Gaming, subject to shareholder approval. This decision aims to sharpen Nazara's focus on core gaming businesses while allowing Nodwin to independently raise growth capital and operate with greater flexibility. Post-deconsolidation, Nazara is expected to hold a stake of approximately 46-47% in Nodwin.

Gaming Segment Performance

The gaming segment showed impressive growth, with revenue increasing by 160% year-on-year and EBITDA growing by 311%. Key contributors to this growth include:

Curve Games

Acquired earlier this year, Curve Games posted revenue of ₹54.60 crore and EBITDA of ₹20.70 crore in Q1 FY26.

Fusebox Games

Revenue grew 49% year-on-year to ₹73.00 crore, with an EBITDA of ₹10.40 crore.

Kiddopia

Reported revenue of ₹45.40 crore and EBITDA of ₹8.50 crore, showing signs of subscriber stabilization.

Animal Jam

Saw a 12.1% increase in revenue to ₹26.40 crore and a robust 55% growth in EBITDA to ₹5.90 crore.

Expansion into Offline Gaming

Nazara has made strategic moves in the offline gaming space:

Smaaash

Acquired through NCLT process, Smaaash delivered revenue of ₹8.10 crore and EBITDA of ₹3.30 crore in the consolidation period starting from June 6th.

Funky Monkeys

Revenue expanded by 6.5% year-on-year to ₹4.90 crore, with plans to add 8-9 new centers this year.

PokerBaazi Performance

Moonshine Technologies, PokerBaazi's parent company (in which Nazara holds a 46% stake), reported its highest quarterly net revenue of ₹191.80 crore. However, it incurred an EBITDA loss due to front-loaded marketing costs related to IPL campaigns.

Future Outlook

Nazara Technologies remains focused on its IP-led gaming strategy and is confident in its ability to scale into a global gaming platform. The company is on track to achieve or surpass its guidance of ₹300.00 crore EBITDA by FY27.

Nitish Mittersain, CEO & JMD of Nazara Technologies, stated, "These results underscore the strength of our IP-led gaming strategy delivering strong topline growth alongside disciplined cost management and a focus on growth with profitability."

As Nazara continues to expand its portfolio and optimize its operations, the company appears well-positioned for sustained growth in the dynamic gaming industry.