MUMBAI: Shares of digital sports company Nazara Technologies crashed 13% on Wednesday after the Union Cabinet approved the Online Gaming Bill, 2025.
The Lok Sabha on Wednesday passed legislation to ban online games played with money as it looks to check rising instances of addiction, money laundering and financial fraud through such applications.
The Promotion and Regulation of Online Gaming Bill, 2025, also seeks to prohibit advertisements related to online money games as well as bars banks and financial institutions from facilitating or transferring funds for any of such games.
Nazara tanked 12.82% to settle at Rs 1,221.65 apiece on the BSE. During the day, it dropped 15.97% to hit an intraday low of Rs 1,177.45.
Similarly, OnMobile Global's stock declined 3.53% to settle at Rs 53.27 apiece while Delta Corp, which tumbled 6.47% to Rs 87.24 in intra-day trade bounced back and ended at Rs 93.83 each, up 0.59%.
Nazara shares remained under pressure even as it issued a clarification stating that the company has no direct exposure to real money gaming (RMG) businesses and that it does not anticipate any material adverse impact on its operating financial performance (revenue or EBITDA).
“As per its latest reported financials (Q1-26), the contribution to revenues and EBITDA (earnings before interest, taxes, depreciation and amortisation) by RMG business is NIL," the company said in a filing to the BSE. The company's only indirect exposure to RMG is through its 46.07% stake in Moonshine Technologies Private Limited (PokerBaazi), it added.
Brokerage firm Prabhudas Lilladher (PL) has raised concerns over Nazara's investment in PokerBaazi as the latter accounts for about 35% of its valuation. PL cautions that if real-money gaming is banned, this investment could be at risk of being written off. Nazara has already invested Rs 805 crore in Moonshine and committed another Rs 255 crore via compulsorily convertible preference shares.
PL maintained a target price of Rs 1,345, but cautioned that if the bill passes and PokerBaazi is forced to shut operations, the fair value for Nazata Tech could fall to Rs 917.
Kunal Gala, Partner, Deal Value Creation, BDO India said that the Promotion and Regulation of Online Gaming Bill 2025 is a watershed movement for the flourishing digital gaming sector of India, engaging more than 500 million users and growing rapidly with a CAGR of 20%. An outright ban on real-money games, however, could push users towards unregulated markets, resulting in the loss of revenue for legitimate establishments and the government, added Gala.