Madhusudan Kela portfolio stock: Nazara Tech share price crashes 11%, falling 22% in 2 days. More pain ahead?

Nazara Technologies share price continued witnessing massive selling pressure for the second consecutive session as the stock crashed 11 per cent in morning trade on Thursday, August 21, on the NSE, a day after falling 13 per cent.

Nazara Tech shares opened at ₹1,178 against its previous close of ₹1,219.40 and plunged 11 per cent to an intraday low of ₹1,085. Around 9:45 AM, the stock, which is held by prominent investors Madhusudan Kela and Zerodha's Nikhil Kamath, traded 10.28 per cent lower at ₹1,094. In two sessions, the stock has lost 22.5 per cent.

Nazara Tech and several other gaming stocks have come under pressure after the government introduced a bill to ban online money games in India. The Lok Sabha on August 20 passed the Promotion and Regulation of Online Gaming Bill, 2025, a legislation that bans online money games in India.

The legislation divides gaming into four categories: esports, educational gaming, social and casual gaming, and real-money gaming. Of these, real-money gaming — where users deposit funds and play for cash rewards — has been declared a criminal offence.

Nazara shares are in a free fall even though the company has clarified that it has no direct involvement in real-money gaming (RMG). According to its latest financial report (Q1 FY26), RMG contributed nothing to the company’s revenue or EBITDA.

Nazara has an indirect link to RMG through its 46.07 per cent stake in Moonshine Technologies Pvt. Ltd., the firm which runs PokerBaazi.

However, Nazara doesn’t control the company or own a majority stake in it. It has invested ₹805 crore in Moonshine through a mix of cash and stock and holds convertible shares worth ₹255 crore, which could be converted into equity later.

Nazara's meaningful exposure to Moonshine Technology is a key concern. Highlighting the risk, brokerage firm ICICI Securities has downgraded the stock to a "reduce" from an "add" and cut the target price to ₹ 1,100 from ₹1,500 earlier.

"The Lok Sabha has passed a bill aiming to regulate the online gaming sector. In our view, the implementation of the bill would essentially make online Real Money Gaming infeasible in India. While most of the companies operating in the space are unlisted, Nazara Technologies has meaningful exposure in the space via Moonshine Technology (PokerBaazi)," ICICI Securities observed.

"We had earlier assigned a ₹400 valuation to Moonshine in our SoTP. Given the ban on RMG, we now cut this to zero. Nazara’s other verticals, such as gamified early learning, publishing and gaming arcades, remain unaffected. The formal recognition of eSports as a sport could be a structural positive for Nodwin Gaming; however, as of now, the impact on earnings seems limited," the brokerage firm added.

(This is a developing story. Please check back for fresh updates.)

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stories by Nishant Kumar

Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.

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