Rakesh Jhunjhunwala-backed Nazara gets ‘sell’ rating from CLSA. Here’s why

NEW DELHI: Global brokerage CLSA has initiated coverage on ace investor Rakesh Jhunjhunwala-backed Nazara Technologies with a ‘sell’ rating, as it feels the prevailing valuations are hefty.

CLSA said Nazara, as India’s first listed gaming company, carries a hefty scarcity premium of three times to its India coverage and 10-75 per cent to global gaming peers.

The brokerage has a target of Rs 1,095 on the stock based on its FY23 EV/Ebitda of 17 times, in line with global gaming peers.

The stock fell as much as 2.25 per cent to Rs 1,622.45 on Friday. The price target suggests a 32.5 per cent fall from the prevailing price. It also suggests a discount to the issue price of its IPO of Rs 1,101.