Nazara Technologies Limited, a prominent player in the gaming industry, has issued a clarification regarding its exposure to real money gaming (RMG) businesses in light of the government's proposed ban on online money gaming businesses. The company's statement comes as a response to recent media reports and aims to provide transparency to its investors and stakeholders.

Key Points of Clarification

• No Direct RMG Exposure: Nazara Tech emphasized that it has no direct exposure to real money gaming businesses. According to the company's latest reported financials, the contribution to revenue and EBITDA from RMG business is nil.

• Indirect Exposure through Moonshine Tech: The company's only indirect exposure to RMG is through its 46.07% stake in Moonshine Technologies Private Limited (PokerBaazi). Nazara clarified that as it does not hold a majority stake or exercise control, Moonshine's revenue is not consolidated in the company's financial statements and has no impact on Nazara's reported Revenue or EBITDA.

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

Financial Impact

Nazara Technologies stated that it does not anticipate any material adverse impact on its operating financial performance (Revenue or EBITDA) in relation to the media reports concerning the proposed ban on online money gaming businesses.

Regulatory Context

The clarification comes in response to media reports regarding the proposed Promotion and Regulation of Online Gaming Bill. While the details of the bill are not explicitly mentioned in the company's statement, it appears to have raised concerns about potential impacts on companies involved in the online gaming sector.

Company's Stance

By issuing this clarification, Nazara Tech aims to provide clarity to its investors and stakeholders about its position in the real money gaming market. The company's statement underscores its commitment to transparency and proactive communication with the market.

As the regulatory landscape for online gaming continues to evolve, Nazara Tech's clarification serves to differentiate its business model from those directly involved in real money gaming operations. This distinction could be crucial as the industry navigates potential regulatory changes in the coming months.

Investors and industry observers will likely continue to monitor developments in the online gaming sector, particularly as they relate to regulatory proposals and their potential impacts on companies operating in this space.

Nazara Technologies Limited, India's leading gaming and sports media platform, reported a strong start with significant growth in revenue and profitability for the quarter ended June 30.

Financial Highlights

• Consolidated revenue surged 99.40% year-over-year to ₹498.77 crore, up from ₹250.08 crore in the same quarter last year.
• EBITDA rose 90.40% to ₹47.40 crore, compared to ₹24.90 crore in the same quarter last year.
• Net profit jumped 236.00% to ₹51.34 crore, a substantial increase from ₹15.28 crore in the same quarter last year.
• Earnings per share (EPS) for continuing operations more than doubled to ₹6.04, up from ₹2.96 in the year-ago period.

Segment Performance

Gaming

• Revenue grew 160.00% year-over-year to ₹240.90 crore
• EBITDA margin of 24.40%

eSports

• Revenue increased 65.00% to ₹260.20 crore
• Reported an EBITDA loss of ₹3.00 crore

Ad Tech

• Revenue contributed ₹106.10 crore to the top line

Strategic Developments

The company announced several key initiatives to enhance shareholder value:

1. Stock Split: The board approved a sub-division of 1 equity share of face value ₹4 into 2 equity shares of face value ₹2 each.

2. Bonus Issue: Nazara will issue bonus shares in a 1:1 ratio, effectively doubling the number of outstanding shares.

3. Leadership Appointment: Mr. Rohit Sharma has been appointed as Whole-time Director and Executive Director, bringing over 25 years of experience in gaming and digital media.

4. Nodwin Gaming De-subsidiarization: The company plans to reduce its stake in Nodwin Gaming, which will be reclassified as an associate company, subject to shareholder approval.

5. Strategic Investments:

   • Acquired Curve Digital Entertainment Ltd for £21.70 million (approximately ₹247.00 crore)
   • Invested in STAN, a gaming community platform

Management Commentary

Nitish Mittersain, Joint MD and CEO of Nazara Technologies, stated, "We are seeing early results from our sharpened focus on IP-led gaming and are reinvesting this momentum into expanding our IP portfolio and strengthening UA to drive sustained growth. Our vision is clear: to build a globally relevant, durable gaming platform from India, capable of competing with the world's best."

Outlook

With a strong quarterly performance and strategic initiatives in place, Nazara Technologies appears well-positioned for continued growth in the gaming and esports sectors. The company's focus on IP-led gaming, strategic acquisitions, and operational efficiencies are expected to drive long-term value for shareholders.

Investors should note that while the company has shown impressive growth, the gaming industry remains highly competitive and subject to regulatory changes, particularly in areas such as real-money gaming where Nazara has exposure through its associates.