Calcutta, March 18: Polaris Financial Technology today said it would demerge its products business into a separate independently listed entity.
The Chennai-based infotech firm will file a scheme of demerger with stock exchanges, market regulator Sebi and Madras High Court.
Subject to regulatory approvals, the new products company will be named Intellect Design Arena Ltd.
“This is a decisive step towards unlocking the potential of the company to respond to emerging opportunities in financial technologies in the coming decade. In fact, it is a win-win for customers, employees and investors alike,” Polaris Financial Technology executive chairman Arun Jain said.
Pursuant to the vertical split, every shareholder of Polaris will receive one share of Intellect.
Based on the recommendations of a special committee comprising independent directors of the company and the audit committee, the Polaris board has decided to offer a special option to shareholders of Intellect to exchange the shares allotted to them with fully secured non-convertible debentures (NCDs).
These NCDs will have a face value of Rs 42 with a coupon of 7.75 per cent per annum, redeemable at par after 90 days.
The new entity is expected to break even by 2014-15 and post good numbers from 2015-16, Jain told The Telegraph.
Intellect will conduct operations in four segments — global universal banking, risk and treasury management, global transaction banking and insurance. Polaris will continue running the services business.
Manish Maakan will take over as CEO of Intellect global transaction banking. Jaideep Billa and Venkatesh Srinivasan will be joint CEOs of Intellect’s global universal banking and risk and treasury businesses, while Pranav Pasricha will be chief of the insurance segment.
Jitin Goyal will continue as the chief executive of the services business.
Shares of Polaris today climbed 11.57 per cent after the announcement, ending at Rs 152.80 on the Bombay Stock Exchange. During the day, the stock surged 17.26 per cent to a high of Rs 160.60.