Rekha Jhunjhunwala-backed Nazara Tech’s two firms have deposits of ₹64 cr in Silicon Valley Bank

Indian gaming and sports media platform, Nazara Technologies' two step-down subsidiaries have cash balances of upto ₹64 crore at Silicon Valley Bank (SVB). Late market mogul, Rakesh Jhunjhunwala's wife Rekha is among the largest public shareholders in Nazara. Due to cash crunch concerns, the California department shut down SVB and made the Federal Deposit Insurance Corporation (FDIC) the receiver of the bank to handle depositors' money.

Nazara's two subsidiaries are Kiddopia Inc and Mediawrkz Inc.

In the regulatory filing, Nazara said, "step down subsidiaries Kiddopia Inc and Mediawrkz Inc hold cash balances at Silicon Valley Bank (“SVB”), which is currently under the receivership of the Federal Deposit Insurance Corporation (FDIC). The balances held at SVB by Kiddopia Inc. and Mediawrkz Inc cumulatively account for $7.75 million ( ₹64 crore)."

Kiddopia is a 100% subsidiary of Paper Boat Apps, and Mediawrkz is a 100% subsidiary of Datawrkz Business Solutions.

Nazara holds 51% in Paper Boat and 33% in Datawrkz Business.

Nazara, in the filing, 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, Nazara said, "we expect no impact on their day-to-day operations, business performance and growth plans due to the SVB event."

Also, Nazara said the Group continues to maintain healthy reserves of cash and cash equivalents in excess of ₹600 crore excluding the SVB-impacted funds.

Lastly, Nazara said, "the situation with SVB remains fluid and the company shall keep all the stakeholders and public at large updated on further developments."

Last week, on Friday, Nazara's share price closed at ₹517.75 apiece down by 1.47% on BSE. Its market cap is around ₹3,426.16 crore.

As per the shareholding pattern, as of December 31, 2022, Rekha Jhunjhunwala holds 65,88,620 equity shares or a 10% stake in Nazara.

On Sunday, US Treasury Secretary Janet Yellen said the federal government will not bail out SVB. However, the government is working to help depositors whose money is in the bank.

As per FDIC data, as of December 31, 2022, SVB's total assets stood at $209.0 billion --- while its total deposits were approximately around $175.4 billion. About 89% of the bank's total deposits are uninsured.

FDIC said, all insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023. While they will pay uninsured depositors an advance dividend within the next week. Also, it said, as the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors.