Nazara Tech subsidiaries hold cash balance of Rs 64 cr in collapsed SVB; Shares tank 7%

Last updated time: 13 March 2023, 13:10 IST

Gaming and sports media platform Nazara Technologies saw its shares fall after the company announced that two of its subsidiaries, Kiddopia Inc and Mediawrkz Inc, have cash balances with Silicon Valley Bank (SVB), which is currently under Federal supervision. Deposit Insurance Corporation (FDIC). The scrip was down 6.70 percent at Rs 483.05 on the BSE. The company has a market capitalization of Rs 3,345.76 crore.

According to Nazara Technologies, Kiddopia Inc and Mediawrkz Inc’s holdings in SVB are a combined $7.75 million or Rs 64 crore).

Kiddopia Inc is a subsidiary of Paper Boat Apps Private Limited (51.5% owned by Nazara) and Mediawrkz Inc is a subsidiary of Datawrkz Business Solutions Private Limited (33% owned by Nazara).

“The FDIC has announced that it will issue advance dividends to depositors next week, with future payments contingent on asset sales. Regardless of the bottom line and its timing, both subsidiaries continue to be well capitalized and generate positive cash flows along with profitability. Therefore, we expect that their day-to-day operations, business performance and growth plans will not be affected by the SVB incident,” Nazara said in the filing.

Further, Nazara Group continues to maintain useful reserves of cash and cash equivalents in excess of Rs 600 crore, excluding those affected by SVB, the company added.

The collapse of the Silicon Valley bank has been hailed as the biggest retail banking failure since the 2008 global financial crisis. SVB’s clients include the largest technology start-ups. The sudden collapse cost SVB about $2 billion. The Federal Deposit Insurance Corporation (FDIC) now has control of $175 billion in customer deposits at SVB. The FDIC created a new bank called Santa Clara National Bank and assured depositors that they would soon have access to their funds.

The US dollar was also hit by the SVB crisis. The dollar index fell by 0.153 percent to 104.080. The index measures the US currency against six peers.

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