Nazara divests ownership in Nodwin in preparation for future fundraising, relegating the company's status from subsidiary to associate.
In a significant move that reflects a growing trend among Indian tech companies, Nazara Technologies has announced it will step back from majority control of its esports subsidiary, Nodwin Gaming. This decision, which will see Nazara's stake reduced from a majority hold (55%) to below 50%, is aimed at providing Nodwin with greater operational independence and financial flexibility.
The move comes as part of a strategic approach to facilitate fundraising and accelerate growth, particularly in sectors like esports and youth media. This is the second time an Indian listed company has reduced its stake in a smaller company to below 50 percent, following PB Fintech's recent reduction of its stake in PB Healthcare Services from 100 percent to 26 percent.
Nazara first bought a 55 percent share in Nodwin Gaming in January 2018. Since then, the company has added more money to support Nodwin's growth, with the latest investment coming in December last year, amounting to INR 64 crore. However, the exact amount of funds Nodwin Gaming is planning to raise from current investors remains undisclosed.
As part of the restructuring, Nazara's board has agreed to give up some special rights it held over Nodwin Gaming and has also agreed to remove Nodwin from its list of main companies, subject to shareholder approval at a meeting on August 13. Post-fundraising, Nodwin will be reclassified from a subsidiary to an associate company.
This change will allow Nodwin Gaming to raise capital more independently while maintaining a strategic relationship with Nazara Technologies, which will remain a shareholder after relinquishing majority control. The funds raised are intended for the growth of Nodwin's esports and youth media business.
The decision to relinquish majority control is likely due to Nodwin Gaming's plans to expand its business. This shift towards partial stake reduction in subsidiaries as a fundraising tool enables these subsidiaries to raise capital more independently while maintaining strategic influence. This trend marks a shift towards structured financial and operational agility in fast-evolving sectors.
The news source for this article is the 'Staff' of 'India', an international franchise of 'Media'. While the article does not provide information about the timeline for the fundraising process or the expected outcome, it underscores the growing strategic approach among Indian tech companies to facilitate fundraising and accelerate growth.
- The strategic decision by Nazara Technologies to reduce its stake in Nodwin Gaming is part of a growing trend among Indian tech companies, aiming to provide more financial flexibility for subsidiaries like Nodwin and facilitate investing in sectors such as esports and youth media.
- As a result of the restructuring, Nodwin Gaming will be able to raise funds more independently while maintaining a strategic relationship with Nazara Technologies, with the funds raised intended for the growth of Nodwin's esports and youth media business.
- This move by Nazara Technologies, along with PB Fintech's recent reduction of its stake, signifies a shift towards structured financial and operational agility in fast-evolving sectors, allowing companies to grow while maintaining strategic influence.
