Gaming and sports media platform Nazara Technologies witnessed a drop in its shares after the company announced that two of its subsidiaries hold cash balances totalling around Rs 64 crore in the now-collapsed Silicon Valley Bank (SVB).
Nazara Technologies on Sunday stated that its two step-down subsidiaries namely Kiddopia Inc and Mediawrkz Inc have cash balances worth $7.75 million in SVB, which was shut down by California banking regulators last week. While Mediawrkz is a wholly owned subsidiary of Datawrkz Business Solutions which is owned partly by Nazara, Kiddopia Inc is a 100% subsidiary of Paper Boat Apps in which Nazara has 51.5% ownership, reported Business Standard.
After Nazara Technologies announced the cash balances, its shares fell 7% today, according to Moneycontrol.
Following the collapse of the SVB, Nazara Technologies said in an exchange that both of its subsidiaries were well capitalised and generating positive cash flows with profitability. It assured investors that the company doesn't expect any impact of the SVB failure on its day-to-day operations, growth plans, and business performance.
Excluding the funds stranded at the SVB, Nazara Technologies said it has over Rs 600 worth of healthy reserves of cash and cash equivalents, the report added.
The Silicon Valley Bank collapse has been termed as the biggest retail banking failure since the global financial crisis in 2008. SVB's customers include some of the biggest technology startups. The sudden collapse resulted in a loss of nearly $2 billion to SVB. The Federal Deposit Insurance Corporation (FDIC) has now taken control of the $175 billion worth of customer deposits in SVB. The FDIC created a new bank called the National Bank of Santa Clara and assured depositors that they will be soon able to access their funds.
The US dollar also took a hit due to the SVB crisis. The dollar index fell 0.153% at 104.080. The index measures the US currency against six rivals.