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State IT minister to review Silicon Valley Bank collapse impact

SVB’s failure has hit banking stocks and is now unsettling Indian entrepreneurs

Our Bureau, Reuters Mumbai Published 13.03.23, 01:20 AM
Rajeev Chandrasekhar, state minister for IT

Rajeev Chandrasekhar, state minister for IT File Picture

India’s state minister for technology said on Sunday he will meet start-ups this week to assess the impact on them of Silicon Valley Bank’s collapse, as concerns rise about the fallout for the Indian start-up sector.

California banking regulators shut down Silicon Valley Bank (SVB) on Friday after a run on the lender, which had $209 billion in assets at the end of 2022, with depositors pulling out as much as $42 billion on a single day, rendering it insolvent.


“Start-ups are an important part of the new India economy. I will meet with Indian Start-ups this week to understand impact on them and how the government can help during the crisis,” Rajeev Chandrasekhar, the state minister for IT, said on Twitter.

India has one of the world’s biggest start-up markets, with many clocking multi-billion-dollar valuations in recent years and getting the backing of foreign investors.

SVB’s failure, the biggest in the US since the 2008 financial crisis, has roiled global markets, hit banking stocks and is now unsettling Indian entrepreneurs.

Two partners at an Indian venture capital fund and one lender to Indian start-ups told Reuters that they are running checks with portfolio companies on any SVB exposure and if so, whether it is a significant part of their total bank balance.

“Spoke to some founders and it is very bad,” Ashish Dave, CEO of Mirae Asset Venture Investments (India), wrote in a tweet.

“Especially for Indian founders ... who setup their US companies and raised their initial round, SVB is default bank. Uncertainty is killing them. Growth ones are relatively safer as they diversified. Last thing founders needed.”

Nazara clarity

Gaming company Nazara Technologies Limited said in a regulatory filing its step-down subsidiaries Kiddopia Inc and Mediawrkz Inc hold cash balances at Silicon Valley Bank, which is under the receivership of the US Federal Deposit Insurance Corporation (FDIC). The balances cumulatively account for $7.75 mn (Rs 64 crore).

FDIC has stated that it would issue an advance dividend to depositors within the next week with future payments coming as asset sales occurred, Nazara said.

“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,” the filing said.

SVB was an investor in Paytm and has exited the company by selling to other investors, Paytm CEO and founder Vijay Shekhar Sharma said.

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