(Reuters) -Shares of Nazara Tech slumped over 21% in two sessions and were headed for their steepest two-day fall on Thursday, after India’s lower house of parliament passed a bill banning online games involving monetary stakes, which analysts warned could make the sector “infeasible”.
The gaming platform operator’s stock fell 9.5% on the day, extending losses after a 13% slide on Wednesday, and hitting a 15-week low of 1,125.1 rupees.
The bill, which now awaits review in parliament’s upper house, says that no person “shall offer, aid, abet, induce or otherwise indulge or engage in” offering online money games and related services.
Violations could result in a jail term of up to three years and a fine, as per the bill.
ICICI Securities said the move would make real-money gaming “infeasible” in India, and downgraded Nazara to “reduce” from “add”, slashing its price target to 1,100 rupees from 1,500 rupees.
The brokerage also cut the valuation of Moonshine Technology, which operates PokerBaazi and other card-based platforms, to zero from 400 rupees. Nazara holds a 47.71% stake in Moonshine.
Nazara Tech is rated “hold” on average, while its median price target is 1,315 rupees, as per data compiled by LSEG.
The stock’s decline has erased more than half of its year-to-date gains. It is now up 9% so far this year, compared with 38%, as of Tuesday.
Shares of peers OnMobile Global and Delta Corp fell about 3% each on Wednesday, following Reuters’ report on the proposed bill.
(Reporting by Manvi Pant and Kashish Tandon; Editing by Sonia Cheema)
