Nazara To Diversify Its Cash Reserves After the Fallout Of SVB In 2023
Nazara Bank, whose two-step-down subsidiaries have 64 crores INR deposits in the Silicon Valley Bank on Monday stated that the US administration‘s statements on protecting depositors for the entire amount has turned out to be a positive outcome and has provided confidence for the recovery of money. The confidence by the US administration has reinstalled confidence among the investors as Nazara seeks for other acquisitions.
Nazara Bank, whose two-step-down subsidiaries have 64 crores INR deposits in the Silicon Valley Bank, on Monday, stated that the US administration‘s statements on protecting depositors for the entire amount have turned out to be a positive outcome and have provided confidence for the recovery of money.
The two subsidiaries have working capital to meet their requirements, including payroll. It has been stated by the Founder and CEO of Nazara Technologies, Nitish Mittersain. He has stated that they have categorically ruled out the chances of layoffs with the company after the collapse of the Silicon Valley Bank.
The current situation provides innumerable opportunities, and Nazara Tech plans to double its efforts to search for good companies where they can acquire and invest, provided attractive valuations.
The statement by Yellen, Treasury Secretary, has reconfirmed to the investors that all the depositors will be protected from the entire amount, which is a positive outcome and makes the investors more confident that they will recover all the money.
The US admin’s statement on SVB Fallout instils confidence among investors, Nazara Technologies to look for better acquisitions:
On Friday, the collapse of the Silicon Valley Bank turned out to be the biggest bank crisis since 2008. Federal Deposit Insurance Corporation took the assets of the Silicon Valley Bank after the clients, including venture-capital firms and VC-backed banks, started to pull their deposits, which increased the pressure on the bank.
The Biden administration has promised the investors that they will have access to all their funds.
Following receipt of recommendations from the FDIC and the Federal Reserve, in addition to consultation with the president, Treasury Secretary Yellen approved steps allowing the FDIC to complete its resolution of the Silicon Valley Bank in a way that protects all investors.
Depositors will be able to access their funds beginning March 13, according to the Department of the Treasury Federal Reserve, FDIC. The taxpayers will not be responsible for paying losses caused by the Silicon Valley Bank.
Furthermore, the UK Government has recently announced that HSBC, the London-based banking major, will buy the UK subsidy of the collapsing Silicon Valley Bank, which has given access to more than 3000 customers worth a valuation of 6.7 billion pounds.
The collapse of the Silicon Valley Bank has shattered the confidence of many entrepreneurs and VC funds.
Nazara Technologies, a gaming platform, has recently announced that two of its step-down subsidiaries hold a total cash balance of 64 crores INR at Silicon Valley Bank. The company has reconfirmed that both of its subsidiaries have enough capital and are generating positive cash flows with great profitability. Hence, they have concluded that they expect no disruptions in their daily operations, business performance, and events of growth due to the SVB collapse.
Mittersain has responded to the crisis stating that Nazara technologies has a 23 years history and have gathered much experience from such situations. They have built resilience, and all of their businesses have turned out to be profitable, even excluding the deposits with Silicon Valley Bank. They have a total reserve of cash, accumulating to 600 crores INR.
The SVB collapse and the related developments will increase some pressure, but this will, in turn, lead to better acquisitions. The two subsidiaries will not require help from Nazara technologies.
He has added that the company would happily collaborate with the Indian government in the tech space.
Nazara Technologies is a diversified gaming platform with a presence in India and across emerging and global markets, including South Africa and North America. It has offerings across diverse interactive segments, including the ad-tech and eSport sectors.
Silicon Valley Bank has focussed on tech startups. The onboarding of accounts was easier, even for the Indian startups.
He has added that they did not see any risk given that Silicon Valley Bank was a reputed firm and included in the top 20 Banks in the US.
The abrupt collapse has put investors in a difficult position, leaving billions of dollars stranded for companies and investors.
Financial stocks and global stocks plummeted after the SVB Financial Group was investigated by US regulatory authorities. It was quickly followed by a drop in reserves, resulting in a market loss of USD 80 billion USD.
As a result of the situation, Silicon Valley Bank has become the most significant bank failure in recent US history. The SVB crisis began within 48 hours of the bank’s declaration that tortoise funds would be used to close balance-sheet gaps. It resulted in a massive selloff, shaking clients’ and depositors’ confidence.
Edited by Prakriti Arora