Plans to Demerge Insurance Business: Mastek

Shares in Mastek surged 20 per cent to Rs 325.20 on Monday after the company's wholly-owned subsidiary Majesco announced a merger with Cover-All Technologies.

Majesco, which provides core insurance systems and services, said it has entered into a definitive merger agreement with Cover-All Technologies, an insurance software company based in Morristown, New Jersey.

Farid Kazani, group CFO and finance director at Mastek, told NDTV that the transaction will create a great positioning for Majesco in the market place for their insurance business. (Watch full interview)

With this acquisition, the entire project management consultancy (PMC) business of Majecso will be close to $100 million in terms of revenue, he added.

Cover-All Technologies has close to 30 customers. Mr Kazani says "it will give them a strong base to cross sell between Majesco and Cover-All".

Mastek said it plans to list Majesco on the New York Stock Exchange, which will unlock value for its shareholders.

Last week, Majesco had announced the signing of a definitive agreement to acquire the insurance business of Agile Technologies LLC.

Mr Kazani said the acquisition of Agile Technologies LLC gives them a "complete suite of the service portfolio" that the company wants to deliver to their customers.

Mastek is looking to grow the insurance business rapidly as it sees good opportunity in US and globally, said Mr Kazani.

In September 2014, Mastek had announced the demerger of its insurance business from itself into a separate company called Majecso in India.

The company has sought approval of the High Court for the demerger of its insurance business from Mastek, Mr Kazani added.