Shares of Nazara Technologies fell 7 per cent in Monday’s trade after the company informed stock exchanges than 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).
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).
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.
Kiddopia Inc is wholly-owned subsidiary of Paper Boat Apps Private Limited. Nazara holds 51.5 per cent in this company. Mediawrkz Inc is a 100 per cent subsidiary of Datawrkz Business Solutions Private Limited. Nazara owned 33 per cent stake in this company.
Nazara said 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,” it said.
Nazara said it continues to maintain 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 the company shall keep all the stakeholders and public at large updated on further developments,” Nazara said.
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