Shares of Nazara Technologies were volatile on Friday after the gaming company said it would invest nearly ₹1,000 crore in a popular online poker app.

What Happened: Nazara Technologies unveiled its largest investment to date on September 12, pumping ₹982 crore into Moonshine Technology, the parent firm of online poker platform PokerBaazi.

This strategic move is set to bolster Nazara’s presence in the growing online skill-gaming sector, which founder Nitish Mittersain views as a key revenue driver for the company in the years ahead.

The investment comes amidst regulatory uncertainties in the sector and the challenges posed by the 28% goods and services tax (GST) regime introduced in October 2023.

According to the deal structure, Nazara will initially acquire a 47.7% stake in Moonshine Technology for ₹831.5 crore in a secondary transaction from existing shareholders, including founder Navkiran Singh, co-founders Puneet Singh, Varun Ganjoo, and Avneet Rana, as well as private equity firm Bellerive Capital.

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Money Talks: Of the total, ₹592.26 crore will be paid in cash, while the remaining ₹239.25 crore will be settled through a share swap, representing a 3.17% stake in Nazara Technologies.

Additionally, Nazara will inject ₹150 crore in primary capital into Moonshine Technology via compulsory convertible preference shares. This move, according to CEO Mittersain, positions Nazara as a leader in India's diversified gaming industry.

Real-money games, like poker, form the bulk of revenue in India’s gaming sector, which grew to $3.1 billion (₹26,019 crore) in FY23 and is projected to reach $7.5 billion (₹62,949 crore) by FY28.

Moonshine Technology, founded in 2014 by Navkiran Singh, initially focused on online poker through PokerBaazi and later expanded into card games, fantasy sports and spectator gaming. PokerBaazi remains the company’s flagship product, contributing over 85% of its FY24 revenue.

Nazara, India's first publicly listed gaming firm, continues to pursue its ambitious growth plans, including a $100 million war chest for global expansion over the next two years. The investment in Moonshine Technology marks a major step in that direction.

Price Action: Nazara’s share price was down 2.45% at ₹983.50 in early trade on Friday, sinking from modest gains at market open.

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