Nazara Tech Shares Plunge 20% Amid Online Gaming Regulation Concerns
Nazara Technologies' stock dropped 20% over two trading sessions following the government's proposal to ban money-based online gaming transactions. The company clarified it has no direct exposure to real money gaming, with only an indirect stake in PokerBaazi through Moonshine Tech. Despite limited direct impact, the stock saw heightened trading activity, with volume surging to 12 times its 30-day average. Analysts have mixed views, with the average price target suggesting a 17.50% upside potential.

*this image is generated using AI for illustrative purposes only.
Nazara Technologies, a prominent player in the Indian gaming industry, has experienced a significant downturn in its share price, shedding 20% of its value over two consecutive trading sessions. The stock's decline comes in the wake of the central government's proposal for a comprehensive ban on money-based online gaming transactions.
Sharp Decline in Share Price
The company's stock witnessed a steep fall, dropping 11% on Thursday following a 15% decline on Wednesday. As of the latest trading session, Nazara Tech shares were trading at Rs 1,116.70, down 8.42% from the previous close. Notably, the trading volume surged to 12 times its 30-day average, indicating heightened investor activity.
Regulatory Concerns and Company Response
The sharp decline in Nazara's stock price is largely attributed to the government's proposed Online Gaming bill, which could potentially impact the operations of companies in the real money gaming sector. Nitish Mittersain, CEO of Nazara Tech, acknowledged that the proposed bill could pose challenges to PokerBaazi's operating model, a company in which Nazara has an indirect stake. However, Mittersain assured that the company would adapt to the evolving regulatory landscape.
Nazara's Exposure to Real Money Gaming
In response to market concerns, Nazara Technologies clarified its position regarding real money gaming:
- The company has no direct exposure to real money gaming businesses.
- Zero revenue and EBITDA contribution from such operations.
- The only indirect exposure is through a 46.07% stake in Moonshine Tech, which operates PokerBaazi.
Analyst Perspectives
Despite Nazara's limited direct exposure, the market reaction has been significant. Brokerage firm Prabhudas Lilladher noted that PokerBaazi contributes nearly 35% to Nazara's sum-of-the-parts enterprise value, explaining the stock's sensitivity to the regulatory news.
Analyst Recommendations
The current market sentiment towards Nazara Tech is mixed:
Recommendation | Number of Analysts |
---|---|
Buy | 3 |
Hold | 2 |
Sell | 4 |
The average price target set by analysts implies a 17.50% upside potential from the current levels.
Looking Ahead
As the gaming industry in India faces potential regulatory changes, companies like Nazara Tech are likely to face short-term volatility. However, the company's diversified portfolio and its readiness to adapt to regulatory changes could play a crucial role in navigating the evolving landscape of the Indian gaming market.