Chennai-based IT firm Polaris Financial Technology Ltd (Polaris) is demerging its products business into an independent entity, the company announced on Tuesday.
After demerger and subject to approval from regulatory authorities and shareholders, the product company will be known as Intellect Design Arena Ltd (Intellect) and comprise four businesses—global universal banking; risk and treasury management; global transaction banking and insurance.
Polaris will continue to run the services business with a strong vertical and solution focus.
The product business is significantly different from the services stream, in terms of investments into product development, talent and sales and distribution, the company said.
Arun Jain, executive chairman, Polaris, said, “This is a decisive step towards unlocking the potential of the company to respond to emerging opportunities in financial technologies in the coming decade. From an investor perspective, on one hand, the shareholder will get an additional share of Intellect, a new horizon business. On the other hand, expanded leadership capacity, greater customer centricity and sharper focus will drive higher value in each of the businesses."
Every shareholder of Polaris will receive equal number of shares of Intellect. The shareholders will have an option to exchange the shares of Intellect with fully secured non-convertible debentures (NCDs). These NCDs shall have a face value of Rs 42 apiece, with a coupon of 7.75 per cent per annum, redeemable at par after 90 days.
Polaris’ scrip shot up over 11.5 per cent to end the day at Rs 152.8 a share on the BSE in a flat Mumbai market on Tuesday.
Jitin Goyal will continue as chief executive officer of the services business, and will be based in London. In the products entity, Manish Maakan will continue as chief executive officer of the Intellect Global Transaction Banking (iGTB) business operating out of London. Jaideep Billa and Venkatesh Srinivasan will continue to be joint chief executive officers of Intellect Global Universal Banking and Intellect Risk & Treasury business, operating out of Singapore and Mumbai respectively; and Pranav Pasricha will continue to be chief executive officer of the Intellect Insurance product business, based in New York.
Polaris Holdings Pvt. Ltd., whose name has been changed to Polaris Banyan Holding Pvt. Ltd., will continue to be the promoter of both the companies. Both companies therefore will operate as Polaris Group Companies, each with its independent management team and board of directors.
(Edited by Joby Puthuparampil Johnson)