Nazara Tech Share Price Slumps 20%: A Detailed Analysis
Nazara Tech’s share price has witnessed a significant decline of 20% in the last two trading sessions. The slump comes after the central government proposed a ban on all money-based online gaming transactions, which has sent shockwaves throughout the gaming industry.
Background of the Proposal
The central government’s proposal aims to regulate the online gaming sector, which has seen exponential growth in recent years. The proposal suggests a sweeping ban on all money-based online gaming transactions, which could have far-reaching implications for the industry.
Nazara Tech’s Exposure to Online Gaming
Nazara Tech has clarified that it has no direct exposure to real money gaming businesses. However, the company has a 46.07% stake in Moonshine Tech, which has indirect exposure to the real money gaming (RMG) segment. This has raised concerns among investors, leading to the decline in the company’s share price.
PokerBaazi’s Contribution to Nazara Tech’s Valuation
According to brokerage firm Prabhudas Lilladher, PokerBaazi contributes nearly 35% to Nazara Tech’s sum-of-the-parts enterprise value. This has flagged risks to Nazara Technologies’ investment in PokerBaazi, leading to a decline in the company’s share price.
Impact on Indian Investors
The proposed ban on online gaming transactions could have significant implications for Indian investors. The online gaming industry has seen tremendous growth in recent years, and a ban could lead to a decline in investments in the sector. Furthermore, the proposal could also lead to a decline in the share prices of companies exposed to the online gaming industry.
Technical Analysis of Nazara Tech’s Share Price
Nazara Tech’s share price has declined by 20% in the last two trading sessions. The scrip fell as much as 11.02% to Rs 1,085 apiece and pared losses to trade 8.42% lower at Rs 1,116.70 apiece. The relative strength index (RSI) was at 21, indicating a oversold position.
Analyst Recommendations
Out of nine analysts tracking the company, three maintain a ‘buy’ rating, two recommend a ‘hold,’ and four suggest ‘sell,’ according to Bloomberg data. The average 12-month consensus price target implies an upside of 17.5%.
Conclusion
In conclusion, the proposed ban on online gaming transactions has led to a significant decline in Nazara Tech’s share price. The company’s exposure to the online gaming industry, although indirect, has raised concerns among investors. Indian investors should closely monitor the developments in the online gaming sector and adjust their investment strategies accordingly.
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