Nazara Technologies is having a tough day today, facing music of a flat world. Silicon Valley Bank (SVB), the bank which collapsed held cash balances of two subsidiaries of the company.
The company issued a statement saying that two of its step-down subsidiaries, Kiddopia Inc and Mediawrkz Inc, hold combined cash balances of $7.75 million (Rs 64 crore).
The Federal Deposit Insurance Corporation (FDIC) has announced that it will issue an advance dividend to depositors within the next week, with further payments coming as asset sales occur.
Nazara has clarified that irrespective of the ultimate outcome and its timing, both subsidiaries are well capitalized, generating positive cash flows and profitability, and hence their day-to-day operations, business performance, and growth plans will not be affected by the SVB event.
Furthermore, the Nazara Group, which includes Nazara Technologies and its subsidiaries, maintains healthy reserves of cash and cash equivalents in excess of Rs.600 crore, excluding the SVB-impacted funds.
The situation with SVB remains fluid, and Nazara has assured its stakeholders and the public at large that it will keep them updated on further developments.
Following this development over the weekend, the stock price fell 7% today morning the moment it opened, hitting a new 52-week low at Rs.483.05. It has recouped from the low and is now trading around Rs.507 levels, down 2%.