Mphasis shares rise on clarification of no exposure to collapsed US banks

Shares of Mphasis climbed higher in the morning trade on March 29 after the company clarified that it has no exposure to the three recently collapsed US lenders.

“Mphasis has no business with, or exposure to, Silicon Valley Bank, Signature Bank or Silvergate Capital, either as a client or a banker. Our business from US regional banks is a low single digit percentage contribution to the overall revenue,” affirmed Nitin Rakesh, Chief Executive Officer and Managing Director of Mphasis, in an exchange filing.

After the collapse of the three US banks, there were concerns that other banking clients may also adjust their IT spending, which could negatively impact the revenue of Indian IT firms. It was anticipated that mid-cap companies such as Mphasis, which conducted business with small US banks, would be particularly affected by these cost-cutting measures.

The management's clarification on the matter soothed investor concerns, resulting in a positive reaction from the stock. At 10.10 am, shares of Mphasis were trading at Rs 1,691.10 on the NSE, up 1.31 percent. The stock also touched an intraday high of Rs 1,711.75.

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In addition to the clarification, a large deal involving 6.48 lakh shares or a 0.35 percent stake in the company also took place on the bourses today.

About 6.48 lakh shares exchanged hands at an average of Rs 1,686.52 per share which takes the total deal value to Rs 109.39 crore.

The parties involved in the deal could not be immediately identified by Moneycontrol.