After the passing of the Online Gaming Promotion and Regulation Bill, 2025 in the Parliament, there has been turmoil in the companies of the gaming sector. In this context, strong selling was seen in the shares of Nazara Technologies this week. The company’s shares fell by about 7 percent in a day to Rs 1085. This fall resulted in loss of investors’ property worth around Rs 916 crore.

However, interestingly, famous investor Rekha Jhunjhunwala had already exited the scene. According to a July 25 report by Financial Express, he held 7.06 percent stake (61.8 lakh shares) in Nazara Technologies as of March 2025. But by June he sold his entire stake. They got around Rs 334 crore from the sale at an average price of Rs 1,225 per share.

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Invest in 25 companies

This decision not only provided protection to her portfolio from the current fluctuations, but this step is also considered to be the completion of the legacy of her late husband and veteran investor Rakesh Jhunjhunwala in this company. Currently, Rekha Jhunjhunwala has investments in 25 listed companies of India, whose total value is said to be more than Rs 40,000 crore.

Many big investors are shareholders

While Rekha Jhunjhunwala exited in time, some other big investors are still invested in Nazara. Market veteran Madhusudan Kela holds 10.96 lakh shares (1.18 per cent stake), while Zerodha co-founder Nikhil Kamath holds 15.04 lakh shares (1.62 per cent stake) through his company Kamath Associates. It is time for these investors to consider whether they should hold these shares or sell them.

Association with moonshine increased concern

The major reason for the decline in the market is believed to be Nazara’s indirect connection with Moonshine Technology (PokerBaazi operator). Although the company has clarified that Moonshine’s income is not included in its financial results, this relationship itself was enough to spread apprehension among investors.

Brokerage rating cut

ICICI Securities has downgraded its rating on Nazara shares and reduced the target price to Rs 1,100 from Rs 1,500. The brokerage house has reduced its earlier moonshine valuation of Rs 400 to zero. However, it also said that Nazara’s other segments – such as gamified early learning, publishing and gaming arcades – will not be affected by this new law.

The company has also stressed that there was no revenue from real money gaming (RMG) in Q1 FY26 and it is not expected to have any material impact on its revenue and EBITDA going forward. But the market perception is that even a small indirect stake can shake the trust.

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The list was made in 2021

Established in 1999 and listed in 2021, Nazara Technologies is one of the first gaming companies in India to expand its presence to Africa and North America. The company’s revenue grew at an average rate of 46 percent annually between FY20 and FY25 and reached Rs 1,624 crore in FY25. The company earned a net profit of Rs 51 crore in FY25, but also recorded an operating loss of Rs 114 crore. Nazara management says it is focusing on global expansion, acquisitions, strengthening e-sports and gaming IP as well as AI-based efficiencies.