Shares of this small-cap IT company rally after an acquisition announcement!

This acquisition shall bolster the company's presence in the US region. 

The shares of Nazara Technologies Ltd are buzzing on the bourses today. As of 11.44 am, the shares of the company are trading higher by 1.28%. Owing to this, the stock is one of the top gainers on BSE from Group A. 

Meanwhile, the frontline index S&P BSE Sensex is trading flat. 

Why the rally?   

Yesterday, the company announced that Sportskeeda, one of its subsidiaries, announced the acquisition of Pro Football Network (PFN), the #3 NFL publisher in the US. The all-cash transaction includes the acquisition of a 73.3% stake for USD 1.82 million (approx. Rs 16 crore) through the primary infusion of capital and secondary stock purchases. In CY22, PFN had revenues of USD 2.1 million (Rs 17.5 crore). This acquisition shall bolster the company's presence in the US region. 

Valuations and historical returns 

The company is currently trading at a TTM PE of 79.8x, as against the industry PE of 25.29x. In FY22, the company delivered an ROE & ROCE of 6% and 8%, respectively. The company is a constituent of Group A stocks and commands a market capitalization of Rs 3430 crore.

Share price movements  

Today, the scrip opened at Rs 521.60 and has touched a high and low of Rs 524 and Rs 517, respectively. So far 37,530 shares have been traded on the bourses. 

At 11.44 am, the shares of Nazara Technologies Ltd were trading at Rs 513.25, an increase of 1.28% from the previous day’s closing price of Rs 506.75 on BSE. The stock has a 52-week high & low of Rs 897 and Rs 481.95 respectively on BSE. 

Company Profile   

Nazara Technologies is a leading India-based diversified gaming and sports media platform with a presence in India and across emerging and developed global markets such as Africa and North America, with offerings across interactive gaming, eSports, ad-tech and gamified early learning ecosystems. Nazara was among the first entrants in the Indian market in eSports (through Nodwin) and cricket simulation (through Nextwave).