We have no exposure to troubled banks in the US: Blackstone-backed Mphasis

Says it has no business with or exposure to SVB, Signature Bank or Silvergate Capital as client or banker

Mid-cap IT services player Mphasis has said that it has no exposure to Silicon Valley Bank (SVB), Signature Bank or Silvergate Capital, either as a client or as a banker. The company clarified this in a statement in a regulatory filing to the exchanges.

“We are continuing to focus on servicing our clients in this heightened environment of volatility and transaction volumes. Mphasis has no business with or exposure to Silicon Valley Bank, Signature Bank or Silvergate Capital, either as a client or banker,” said Nitin Rakesh, chief executive officer and managing director, Mphasis, adding, “Our business from US regional banks is a low single-digit percentage contribution to the overall revenue.”              

The statement comes after several reports from analysts projected that Mphasis may be impacted due to the recent turmoil in the US. Mphasis exposure to the banking and finance services is 61.9 per cent as of end of December 31, 2022.

Analysts expect players such as Tata Consultancy Services (TCS) and Infosys to create provisions in Q4 FY23 for a possible impact from the fall of SVB. Analysts had said that Indian IT players such as TCS, Infosys, Wipro, HCL Technologies and LTIMindtree, among others, have exposure to some of the troubled banks.

Analysts also said that though the immediate impact of the banking turmoil might not be evident in Q4 FY23, it might be felt in the FY24 growth momentum.

“We expected a growth slowdown in FY2024 to play out in the form of a weak March 2023 quarter, followed by a moderate uptick in 1QFY24 and normalisation in 2QFY24. Current woes in the banking sector can impact sequential growth by 1-2 per cent in 1QFY24,” said a note from Kotak Institutional Equities. The note added that its current growth forecast for leaders, viz., for FY2024E, stands at around 8 per cent, which may get impacted by 1-2 per cent due to the current crisis