Nazara Technologies, the backer of Dream11, is bleeding on stock exchanges, falling by nearly 28% in just 4 sessions. The extreme selling pressure in this gaming stock is due to the Online Gaming Bill that was approved by Parliament, banning real-money games from asking for real cash on their platforms from users. The online gaming companies have taken a massive hit, and Nazara Tech is no different. Nazara Tech, which has already announced a 1:2 stock split and 1:1 bonus, has erased crores worth of market cap. It makes us wonder, will the stock halve way before its split or bonus?
Nazara Technologies Share Price:
The stock price entered into a deep selloff since August 20th as all focus shifted to the Online Gaming Bill. The bill was officially passed by the Parliament on August 21, 2025. However, Nazara started to face the brunt from the prior day onward.
On August 20th, Nazara declined by a whopping 12.82%, followed by a 1.31% drop on August 21st. Further, the relentless panic selling continued on August 22, with Nazara falling by 4.13% and on August 25, with a decline of 4.3%.
On Monday, Nazara dropped more than 12% to hit an intraday low of Rs 1,015.45 apiece, before recovering some of the losses and closing at Rs 1,115.80 on BSE, down by 3.5% with a market cap of Rs 10,334.12 crore.
If we take into consideration the August 25th intraday low, NAZARA has nosedived by Rs 385.9 from August 20th to date. If we take into consideration the August 25th closing price, Nazara is down by Rs 285.55 in the past four sessions.
Will Nazara Stock Continue To Be Under Pressure?
For gaming stocks, Hariprasad K, a SEBI-registered Research Analyst and Founder - Livelong Wealth said, "The uncertainty around regulatory tightening is likely to weigh on sentiment in this pocket in the near term."
He earlier explained that the immediate worry is their exposure to real-money gaming, but both companies also derive revenues from non-money segments such as eSports, content, and offline operations. This diversification could help them stage a comeback over time once the market digests the regulatory impact.
Nazara has more than Rs 1,000 crore worth exposure in real money games through its associate company.
On August 22, Nazara announced that its associate company, Moonshine Technologies, where it holds a 46.07% stake, has ceased offering real money online gaming operations. Nazara said it will evaluate the future course of action following the enactment of the Bill.
Earlier on April 20, 2025, the company had clarified over media reports that Nazara has no direct exposure to real money gaming (RMG) businesses. As per its latest reported financials (Q1-26), the contribution to Revenues and EBITDA by RMG business is NIL. That time, Nazara said its direct exposure in real-money games is through a stake in Moonshine, but this associate company's revenue is not consolidated in the Company's financial statements and has no impact on the Company's reported Revenue or EBITDA. The contribution to PAT by Moonshine as a share of profit & loss by associate is negative in Q1-26.
Overall, Nazara's investment is up to Rs 805 crore for equity shares in Moonshine through a combination of cash and stock. Also, it holds additional compulsory convertible shares amounting to Rs 255 crore in Moonshine. In total, Nazara's exposure is around Rs 1,060 crore.
Hence, it will be keenly watched how Nazara performs in the near term considering the stock split and bonus issue announcement of the company will eventually also adjust its stock price.
Nazara Technologies Stock Split:
The gaming company has declared a stock split of of 1 (One) equity share of face value of Rs. 4/- (Rupees Four) each fully paid-up into 2 (Two) equity shares of face value of Rs. 2/- (Rupees Two) each fully paid-up. The ratio will be 1:2 eventually.
This will be Nazara's first ever stock split.
In general terms, during a stock split, the already owned shares split into smaller shares. This reduces the proportion of face value.
Nazara Technologies Bonus Issue:
Further, Nazara has also declared a bonus issue of 1:1 ratio, meaning it will issue 1 (One) bonus equity share of Rs. 2/- (Rupees Two) each for every 1 (One) equity share of Rs. 2/- (Rupees Two) each fully paid-up.
This will be the second bonus by Nazara. Earlier, the company turned ex-bonus for the first time in June 2022, for bonus issue of 1:1.
The effects of bonus issues are:
- Increases the number of outstanding equity shares
- Reduces share price in proportion to the number of bonus shares issued.
- Reduces free reserves and surplus of the company.
- Creates implicit value per equity share.
- Increases liquidity in the equity shares on the stock exchanges.
- Reduces per share ratios such as earnings per share, or book value per share, among others.
The record dates will be announced in due course for both stock split and bonus issues.
BUY/SELL Nazara Technologies:
As of now, the consensus recommendation from 11 analysts for Nazara Technologies Ltd. is HOLD, as per Trendlyne data. The average target price is set at Rs 1212 apiece, signaling between 8-9% potential upside ahead.
Disclaimer: The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.
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