Ahmedabad-based IT services company Mastek Ltd is planning to demerge its insurance products and services business into a separate listed company, as per a stock market disclosure.
The board of the company has approved the proposal to demerge the insurance products and services business into Minefields Computers Private Limited, which would be named as Majesco Ltd after transfer of the offshore insurance operations by Majesco to Majesco Software and Solutions India, a wholly owned subsidiary of MajescoMastek Insurance Software and Solutions, the company said in the filing to the stock exchanges.
The new company Majesco is proposed to be listed on the Bombay Stock Exchange and the National Stock Exchange. Mastek shareholders will receive one equity share of Majesco for every equity share they hold in Mastek.
“This is part of Mastek’s continuing endeavour to maximise shareholder value and create a platform for the insurance products and services business to tap the immense opportunity in the US and global insurance market,” S Sandilya, chairman, Mastek, said in the statement.
Founded in 1982, Mastek Ltd is a software solutions and integration services company and offers a suite of information technology solutions and services. The company serves insurance, financial services and government sectors.
While Kotak Investment Banking and PwC acted as transaction advisors, Khaitan & Co was the legal advisor. PwC also acted as the tax advisors and Kotak Investment Banking also provided the fairness option to the board of Mastek. Walker Chandiok & Co LLP as Chartered Accountants submitted the valuation report.
Shares of the company were trading at Rs 257.90 per share, up 9.98 per cent on the BSE mid-day trading in a weak Mumbai market on Monday.
(Edited by Joby Puthuparampil Johnson)