Nazara Tech sheds ₹2,800 crore in M-cap despite no hit from RMG bill

Nazara Tech has no direct exposure to real money gaming but holds a 46.07 per cent stake in Moonshine Technologies, the parent of PokerBaazi

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Nazara Technologies' market value tumbled nearly ₹2,800 crore as the stock dropped 22 per cent in two days, despite the company's claim that the new Online Gaming Bill will not affect its revenue.

 

After a 15 per cent drop in the previous session, the stock fell another 11 per cent to ₹1,085 apiece on Thursday, making investors jittery about the Mumbai-based company. In the last two sessions alone, the market capitalisation fell from ₹13,150 crore to ₹10,360 crore, according to Bloomberg.

 

So far this year, the stock is trading with gains of 11.4 per cent, compared to a 6.2 per cent advance in the benchmark Nifty 50 index. 

 

Trigger behind Nazara Tech share rout

The Lok Sabha on Wednesday passed the Promotion and Regulation of Online Gaming Bill, 2025, which bans all forms of real-money gaming (RMG) and their advertisements in India. 

 

The Bill proposes jail terms of up to three years and fines of up to ₹1 crore for anyone offering RMG in the country and prohibits banks from working with companies providing such services.

Nazara Tech says 'no direct exposure' 

The company clarified that the company has no direct exposure to RMG businesses. However, it has an indirect exposure through its 46.07 per cent stake in Moonshine Technologies Pvt. Ltd. (PokerBaazi). 

 

As Nazara Tech does not hold a majority stake or exercise control, Moonshine’s revenue is not consolidated in its financial statements and has no impact on the reported revenue, Nazara clarified. Nazara Tech invested ₹805 crore in Moonshine through a mix of cash and stock and also holds compulsory convertible shares worth ₹255 crore. 

Will Nazara's stock slide persist?

Analysts said the sell-off is driven more by perception than fundamentals. The June quarter results reflected steady growth across core verticals, underpinned by improved margins in e-sports and higher user engagement in gamified content, Harshal Dasani, Business Head, INVasset PMS, said. However, he added that in the short term, uncertainty around the bill's implementation and its effect on associate investments could keep volatility elevated.

 

For long-term investors, Nazara's diversified, non-RMG revenue base and strong balance sheet offer comfort. Traders, however, may prefer caution until regulatory clarity emerges, Dasani said. "Sustained delivery on earnings and reduced noise around Moonshine will be key triggers for sentiment recovery."

 

ICICI Securities cut the ratings on the stock to 'Reduce' from 'Add' and lowered the target price to ₹1,100 per share from ₹1,500, earlier, according to Bloomberg. "While most of the companies operating in the space are unlisted, Nazara has meaningful exposure in the space," the brokerage said. 

 

Nazara's other verticals, such as gamified early learning, publishing and gaming arcades, remain unaffected, ICICI said in a note, which Business Standard is yet to verify.