Why Jhunjhunwala stock pick Nazara Technologies is on fire today
Nazara Technologies Ltd, the first digital gaming firm to go public last year, had seen a bumper listing with its stock rocketing over 80% as it opened for trading compared to the issue price.
If that was not enough, it went on to climb and in fact tripled in seven months to hit a life-time high as the stock market indices rose to their record levels in October 2021.
But it lost two-thirds of the value over the next nine months. Indeed, in July, it was just about trading at a marginal premium to the issue price.
But the stock has taken flight as the market bounced back. Even though Rakesh Jhunjhunwala, its marquee backer when it was still a startup, passed away last month, the stock has seen a momentum build up with a new acquisition in the US, attractive returns promised by brokerage house in their price target for the stock.
However, the latest trigger to the stock is a Google U-turn. Google that controls much of Android ecosystem with its Play Store is changing its policy that had barred real-money fantasy games. It has announced, albeit a limited period pilot, to allow daily fantasy sports and rummy apps on its app marketplace.
This will be on for one year starting September 28, and real-money fantasy sports and rummy apps from local developers will have to apply and get onboarded.
The tech giant had taken a hard stance on the subject earlier and two years ago removed for a short period removed payments giant Paytm from the Play Store for pushing its gaming unit that was construed as a betting app.
But fantasy sports have become big since then with around 130 million users, one of the largest in the world.
Investors are seeing a much bigger opportunity building up for game developers like Nazara with the relaxation.
Nazara stock has shot up over 10% in mid-day trades on Friday against a flat Mumbai market even though the benchmark indices have been raring to go past the psychological critical mark of 60,000 for Sensex and 18,000 for Nifty.
Nazara had also issued bonus shares a few weeks ago that has made trading easier on the counter.
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