Gaming and sports media platform Nazara Technologies witnessed a drop in its shares after the company announced that two of its step-down subsidiaries Kiddopia Inc and Mediawrkz Inc held cash balances at Silicon Valley Bank (SVB), which is currently under the receivership of the Federal Deposit Insurance Corporation (FDIC). The scrip fell 6.70 per cent to hit a low of Rs 483.05 on BSE. The company had a market capitalisation of Rs 3,345.76 crore.
Nazara Technologies said that the balances held at SVB by Kiddopia Inc and Mediawrkz Inc cumulatively account for $7.75 million or Rs 64 crore).
Kiddopia Inc is a subsidiary of Paper Boat Apps Private Limited (owned 51.5 percent by Nazara), while Mediawrkz Inc is a subsidiary of Datawrkz Business Solutions Private Limited (owned 33 percent by Nazara).
“FDIC has stated that it would issue an advance dividend to depositors within the next week with future payments coming as asset sales occurred. Regardless of the ultimate outcome and its timing, both subsidiaries continue to be well capitalised and are generating positive cash flows along with profitability. Therefore, we expect no impact on their day-to-day operations, business performance and growth plans due to the SVB event,” Nazara said in the filing.
Further, the Nazara Group continues to maintain healthy reserves of cash and cash equivalents in excess of Rs 600 crore excluding the SVB impacted funds, the company 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 per cent at 104.080. The index measures the US currency against six rivals.
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