Shares of Nazara Technologies Ltd. declined after the Tamil Nadu cabinet approved an ordinance to ban online gaming, involving betting, in the state.
The stock of the online gaming platform fell as much as 4% intraday on Tuesday, and is on course to log losses for the third session in a row. Over the last three days, the scrip has dropped more than 12%.
The ordinance will be promulgated after the governor's approval, news agency ANI reported.
Over FY17-FY21, Nazara Technologies has steered its business from value-added service provider to a diversified gaming platform with six strategic acquisitions.
Recently, Google Play also said it would run a year-long pilot programme of daily fantasy sports and rummy apps for users in India.
According to Nitish Mittersain, founder and joint managing director at Nazara Technologies, skill-based real-money gaming business has grown quite a bit in the last few years.
"It has largely operated in a unclear, unregulated environment. Players like ourselves have found it difficult to make large investments in the space, without clarity on taxation," he said in a recent interview with BQ Prime's Niraj Shah. "Therefore we've been asking for clarity for a long time, so we can double down this opportunity."
On Tuesday, trading volume of Nazara's stock was nearly twice the 30-day average, according to Bloomberg data. Of the 11 analysts tracking the firm, eight maintain a 'buy', one suggests a 'hold' and two recommend a 'sell'. The return potential of the stock is 26.9%.
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