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This IPO-bound firm has Jhunjhunwala backing, to exploit betting on 2018 FIFA World Cup

NEW DELHI: Ace investor Rakesh Jhunjhunwala in December boug..

NEW DELHI: Ace investor Rakesh Jhunjhunwala in December bought a stake in a Mumbai-based online gaming firm, which has just expanded its business horizon by securing a betting licence in Kenya.

The company with operations in 61 countries is expected to launch its initial public offering coinciding with the 2018 FIFA World Cup in Russia.

With fresh investments, the company plans exploit betting in sports and the fantasy market in the African countries, beginning with the FIFA World Cup 2018.

The company is Nazara Technologies.

Its subsidiary NZWorld Kenya, where the company holds 70 per cent stake, is planning to launch sports betting, sports fantasy, sports arcade and sports real money quiz, starting with FIFA in June 2018.

Nazara recently made many investments, including in MasterMind Sports, Moong Labs and HalaPlay. It recently acquired Chennai-based NextWave Multimedia which predominately focuses on developing casual and multi-player mobile games in sports genre. In addition, it acquired a 55 per cent stake in NODWIN Gaming.

As ESL, the worlds largest eSports (electronic sports/pro gaming) company, recently invested in Nazara, its subsidiary NODWIN secured exclusive rights of using the ESL system and platform for next five years, Nazara has been looking to expand its presence in the eSports business.

In betting games, real money gaming is quite popular in African countries like Ghana, Nigeria, Cameroon and Kenya. Unlike India, where betting is not allowed in sports, there is a clearly laid-out licensing framework in Kenya.

“The product proposed for Kenya is a real-time social predication sports game, where players can bet real time among their friends, which was developed by one of Nazaras investee companies, Mastermind Sports (Mastermind),” Pratik Shah, Founder & CEO, Mastermind Sports, said in a statement.

“Worldwide, real-money sports gaming is becoming mainstream. We believe that Africa, starting with Kenya, presents a growth opportunity for us with their appetite for live sports gaming,” he said.

In December 2017, ace investor Rakesh Jhunjhunwala acquired shares in the company from Westbridge. Another investor, Utpal Seth, also acquired shares in the IPO-bound company.

The two have been given the first right to participate or subscribe to all equity shares in any fund raising by the company if Nazara does not undertake an IPO by December 7, 2018.

Also, without the affirmative written consent of Rakesh Jhunjhunwala and Seth, Nazara will not undertake certain actions such as raising new capital, change in the scope of business, related party transactions, change in rights associated with equity shares and any acquisition, the company said in the draft prospectus.

At the time of the draft filing, Jhunjhunwala had 3,294,310 shares, or 12.21 per cent stake, in Nazara, being the third biggest shareholder.

During the six-month period ending September 30 2017, the companys international operations accounted for 79.13 per cent of total revenue. Africa accounts for 19 per cent and West Asia nearly one-third. The company has business interests in West Asia, Southeast Asia and Latin America, besides India.

The global gaming market is projected to increase to $151.7 billion by 2021. Global eSports revenue is forecast to reach $1.68 billion in 2021, more than triple the total revenue in 2016.

Nazara reported Rs 190.18 crore revenue for FY17 and Rs 83.89 crore for the six months ending September 30, as per the company's draft papers filed with Sebi. The company reported Rs 19.84 crore profit in H1FY18 compared with Rs 59.72 crore in FY17, where it attributed the fall to one-time employee benefit expenses for implementation of the ESOP 2016, and payment of tax on dividend income from subsidiaries in Dubai and Singapore into India.

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