Nazara Tech Plunges 18% as Govt Proposes Strict Online Gaming Regulations

On August 22, 2025, Nazara Technologies, a prominent player in the digital gaming industry, has found itself at the center of a regulatory storm. The company's stock has slumped 18.25% in just three trading sessions, hitting a low of ₹1,145.55 on the BSE, as investors grapple with the implications of the Union Cabinet's approval of the Online Gaming Bill 2025.

The proposed legislation, set to be introduced in Parliament, aims to regulate gaming platforms that offer monetary rewards. The government's concerns revolve around the potential risks to mental health, money laundering, and fraudulent transactions associated with such platforms.

The tighter regulatory framework is expected to bring greater compliance requirements, potentially denting sentiment across the digital gaming industry. Nazara Technologies, however, has clarified that the new rules will have no direct impact on its revenues or EBITDA.

Adding to the intrigue is the role of ace investors. Rekha Jhunjhunwala, who once held a 7.06% stake in Nazara, has fully exited her investment, cashing out nearly ₹334 crore at an average price of ₹1,225 per share. This move has brought an end to the Jhunjhunwala family's association with the stock.

In contrast, marquee names like Madhusudan Kela and Zerodha co-founder Nikhil Kamath continue to hold their stakes, signaling confidence in Nazara's long-term prospects. Analysts suggest that traders may need to exercise caution until regulatory clarity emerges, as volatility could persist in the short term.

However, for long-term investors, Nazara's diversified revenue base and strong balance sheet provide comfort. Sustained delivery on earnings and reduced noise around its associate company Moonshine Technologies, which operates PokerBaazi, will be key triggers for sentiment recovery.