A day after Nazara Technologies announced that two of its step-down subsidiaries hold cash balances of around Rs 64 crore at the Silicon Valley Bank, the company’s CEO and Founder Nitish Mittersain said the firms were still in good shape and that the parent firm doesn’t need to step-in to support the subsidiaries.

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“Both the subsidiaries operate with businesses in the US, which is why they have accounts with SVB. But at the same time, both companies for us are very profitable businesses generating positive cash flows, and have enough and sufficient working capital besides these funds, which were really free cash parked over there. So none of the businesses is impacted, none of the operations are impacted at all for us,” Mittersain told CNBC-TV18 in an exclusive interaction.

On Sunday, too, Nazara Technologies, in a regulatory filing, said both subsidiaries — Kiddopia Inc and Datawrkz — continue to be well capitalised.

The remarks come against the backdrop of the dramatic collapse of the Silicon Valley Bank — the default bank for many high-flying startups and described as a linchpin of tech investing — roiled global markets, as it marked the largest bank failures since the 2008 global financial crisis.

Reflecting on the US bank, Mittersain said, SVB Financial offered faster onboarding of accounts for international companies and since it's been around for 40 years, it gave his firms the confidence to park money over there.

Even as the Silicon Valley Bank developments took Nazara Tech by surprise, the gaming firm's CEO says the overnight statement by the Fed gives hope about recovering the entire amount.

He was referring to a joint statement issued by the Department of the Treasury, Federal Reserve, and FDIC, that said, the depositors will have access to all their money starting March 13 and that no losses associated with the resolution of the Silicon Valley Bank (SVB) will be borne by the taxpayer.

Also Read: These companies have deposits in Silicon Valley Bank. Check list here

US Treasury Secretary Janet Yellen has said the government will ensure that all depositors are covered, not only the amounts covered by $250,000 but beyond that, as well, Mittersain noted.

“But it's a fluid situation. So, we will continue to monitor it over the next few days before we go back with an update to the market officially. Our understanding over the weekend was that there will be some sort of haircut. But the statement that has come in overnight makes us a lot more confident that we could probably recover 100 percent of our deposits,” he said.

Mittersain reiterated that Kiddopia has sufficient funds to meet working capital needs and that both Kiddopia and Datawrkz Business were in good shape and that there is no risk of job cuts because of the US bank crisis.

Also Read: What happened at the Silicon Valley Bank and why does it matter?

United States regulators have cleared a plan to protect Silicon Valley Bank depositors and have assured that no losses would be borne by the taxpayers. The Joe Biden administration announced that depositors of the SVB will have access to their money from March 13.

Meanwhile, Freshworks, too, has shared that it has been a customer of Silicon Valley Bank since its early days. "The vast majority of our cash and marketable securities today is not held at SVB. We use SVB and several other banks for normal operations (receiving customer payments, processing payroll and payments to our vendors). Our exposure to the current SVB situation is minimal relative to our overall balance sheet. We are working with our customers and vendors who were using our SVB account to migrate to alternate bank accounts."

It does not foresee any disruption to its employees or customers due to the US bank's collapse.

Though the Fed and FDIC are providing a backstop, Union Minister of State for Electronics and IT, Rajeev Chandrasekhar, on March 12 said he will hold a meeting with the startup Founders and CEOs next week to understand how the government can assist them to overcome the crisis.

Also Read: Y Combinator estimates 1 lakh jobs within its community at risk due to SV Bank collapse

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