Nazara Tech shares fall 12% after online gaming bill clears; Prabhudas Lilladher sees sharp cuts to target

Shares of Nazara Technologies Ltd. declined as much as 12% on Wednesday, August 20, as the government is likely to propose sweeping restrictions on online money games under the upcoming Online Gaming Bill, 2025.The draft Bill is expected to prohibit individuals or entities from offering online money games or related services in India. It will also ban advertisements promoting such games and restrict financial transactions linked to them. Banks and financial institutions may be barred from facilitating payments to these platforms.

If passed, the Online Gaming Bill, 2025 would represent a significant tightening of regulations in India’s online gaming sector, with major implications for platforms offering real-money formats.

What PL said on Nazara TechBrokerage firm Prabhudas Lilladher has raised concerns over Nazara’s investment in PokerBaazi, following the cabinet’s clearance of the Online Gaming Bill, which proposes a ban on all real-money games.

Nazara holds approximately 48% stake in PokerBaazi (Moonshine Technologies), with an investment of ₹805 crore already made and plans to invest an additional ₹255 crore through compulsorily convertible preference shares. Prabhudas Lilladher cautions that if real-money gaming is banned, this investment could be at risk of being written off.

PokerBaazi makes up 35% of Prabhudas Lilladher’s valuation target for Nazara. The brokerage has set a target price of ₹1,345, but if PokerBaazi is removed from the equation, the target price would fall to ₹917.

Nazara’s RMG exposureIn Q1 FY26, Nazara Technologies reported total revenue of ₹498.8 crore, marking a 99% year-on-year increase. A major portion of this came from Moonshine Technologies, the parent company of PokerBaazi, which generated ₹191.8 crore in revenue, up 54% on-year.

PokerBaazi alone accounted for approximately 38% of Nazara’s total revenue during the quarter, highlighting the company’s indirect exposure to the real-money gaming (RMG) segment through its stake in Moonshine.

Nazara issues clarification

In an exchange filing, Nazara Technologies clarified that it has no direct exposure to the RMG businesses. As per its Q1 FY26 financials, the contribution to revenue and EBITDA from RMG is NIL.

The company said that its only indirect exposure is through a 46.07% stake in Moonshine Technologies (PokerBaazi). Since Nazara does not hold a majority stake or exercise control, Moonshine’s revenue is not consolidated in Nazara’s financial statements and has no impact on reported revenue or EBITDA.

The contribution to profit after tax (PAT) by Moonshine, recorded as share of profit/loss of an associate, was negative in Q1 FY26, Nazara added.

Nazara reiterated that it does not expect any material adverse impact on its operating financial performance (revenue or EBITDA) in light of recent media reports.