Cyril Amarchand Mangaldas Advises Nazara Technologies and its Promoters on the First Online Gaming Company IPO in India

Cyril Amarchand Mangaldas advised Nazara Technologies Limited (Nazara/Company) and its promoters, Vikash Mittersain, Nitish Mittersain and Mitter Infotech LLP, on its recently concluded Initial Public Offer (IPO). As Indian counsel to the Company, we were responsible for drafting the entire document, including depicting Nazara’s complex business model across various business verticals and the analysis of its financial performance. Nazara’s business covers almost all facets of online mobile-based interactive gaming, eSports and gamified early learning ecosystems.

The IPO of Nazara Technologies is the first ever listing by an online gaming company in India and was highly successful, witnessing strong demand across all categories of investors. The Capital Markets team of Cyril Amarchand Mangaldas advised Nazara Technologies and its Promoters on the Transaction.

The Transaction team was led by Yash Ashar, Partner & Head – Capital Markets; Gokul Rajan, Partner; and Reuben Chacko, Partner; with support from Shivani Satyarthi, Principal Associate; Aashima Johur, Principal Associate – Designate; Ambuj Gupta, Associate; Akshay Singh Ralhi, Associate; Sanyukta Saraf, Associate and Aakansha Bhardwaj, Associate.

From a primarily telecom-based subscription business model, Nazara Technologies has diversified into a leading gaming and sports media platform, with offerings across gamified early learning, freemium mobile games, eSports, eSports media and skill-based, fantasy and trivia games with significant presence in India and across Africa and North America.

Given that Nazara did not have comparable listed peers in the market, drafting of the business sections demanded nuanced attention to certain key aspects, including, among others, the diverse portfolio of offerings, key performance indicators such as EBITDA, segment EBITDA, NAV and net worth and statistical and other comparative information commonly used within the Indian mobile gaming industry to evaluate financial and operating performance of the Company, its market positioning, Intellectual Property, particularly for the eSports business, where both content and event IP are crucial factors, various models for monetisation across segments, including, subscriptions, ad revenues, media licensing, broadcasting, in-app purchases, etc and most importantly, the legality of real money gaming.

In addition to the nuanced business model, the large and diversified corporate structure of Nazara, which included 19 subsidiaries, both domestic and overseas, and the large pre IPO shareholder base of over 2,000 shareholders added to the complexity of the transaction.

As a part of the Transaction, 5,294,392 equity shares of face value of INR 4 each were allotted for cash at a price of INR 1,101 per equity share, aggregating to INR 582.69 crores.

Other parties and advisors involved in the Transaction included ICICI Securities Limited, IIFL Securities Limited, Nomura Financial Advisory and Securities (India) Private Limited, and Jefferies India Private Limited (Book running lead managers (BRLMs)).

The Transaction was signed on October 17, 2020 and closed on March 30, 2021.

India’s Leading Law Firm, Cyril Amarchand Mangaldas was founded on May 11, 2015, and takes forward the values going back 103 years, of the erstwhile Amarchand & Mangaldas & Suresh A. Shroff & Co. Tracing its professional lineage to 1917, the Firm has over 750 lawyers, including 137 partners, and offices in India’s key business centres at Mumbai, New Delhi, Bengaluru, Hyderabad, Chennai and Ahmedabad. The Firm advises a large, and varied client base that includes domestic and foreign commercial enterprises, financial institutions, private equity funds, venture capital funds, startups and governmental and regulatory bodies.

The Firm received “Law Firm of the Year” award at the Asian Legal Business (ALB) India Law Awards 2020 and “Law Firm of the Year, India” at the Asialaw Regional Awards 2020. The firm was also named as the “Most Innovative National Law Firm of the Year – India for 2020” at the IFLR Asia Awards and voted as the “Employer of Choice for 2020” from India, by the Asian Legal Business.