Jhunjhunwala is putting Rs 180 crore in the Mumbai-based Nazara that plans to go public next year, one of the first domestic internet and mobile ventures to tap the capital markets. With this new tranche of capital, Nazara has mopped up Rs 500 crore in pre-IPO placements done through a secondary transaction.
Nazara's early investor WestBridge Capital has partially sold its stake, taking its shareholding down to around 30% . WestBridge is possibly looking to clock a bumper 40-50 times return on its $3-million investment made in 2005. IIFL had picked up a minority stake for Rs 330 crore in Nazara earlier this month.
"We are long-term investors and see a huge potential in Nazara, which has a leadership position in the mobile gaming space, that is a structural theme with long tailwinds. It has an adaptable and agile management team to take on a dynamic environment," Jhunjhunwala said. A famed equity investor, Jhunjhunwala has shied away from betting on digital startups saying most of these companies are loss-making at the moment. Nazara, which is cash flow positive, therefore, fits the bill to attract his investment.