Nazara Technologies Shares Sink 7% Following Silicon Valley Bank Collapse

New Delhi:

Gaming and sports media platform Nazara Technologies saw its shares fall after the company announced that two of its subsidiaries have cash balances of around Rs 64 crore with Silicon Valley Bank (SVB).

Nazara Technologies said on Sunday that two of its subsidiaries Kidopia Inc and Mediawrkz Inc have cash balances of $7.75 million in SVB, which was closed by California banking regulators last week. Mediawrkz is a wholly owned subsidiary of Datawrkz Business Solutions, which is partly owned by Nazara, Kiddopia Inc is a 100% subsidiary of Paper Boat Apps, which is 51.5% owned by Nazara, reports Business Standard.

According to Moneycontrol, its shares fell 7% today after Nazara Technologies announced a cash balance.

After the collapse of SVB, Nazara Technologies said in an exchange that both its subsidiaries were well capitalized and generating positive cash flows with profitability. It reassured investors that the company does not expect the failure of the SVB to have any impact on its day-to-day operations, growth plans and business performance.

Excluding the funds stuck in SVBs, Nazara Technologies said it has healthy reserves of over Rs 600 crore in cash and cash equivalents, the report said.

The collapse of Silicon Valley Bank is known as the biggest retail banking failure since the global financial crisis in 2008. SVB’s clients include some of the largest technology startups. SVB lost approximately $2 billion due to the sudden collapse. The Federal Deposit Insurance Corporation (FDIC) now has control over $175 billion of customer deposits in SVB. The FDIC created a new bank called the National Bank of Santa Clara and assured depositors that they would soon be able to access their funds.

The US dollar also took a hit due to the SVB crisis. The dollar index closed down 0.153% at 104.080. The index measures the US currency against six rivals.