The board of KPIT Technologies has approved a draft composite scheme for amalgamation of Birlasoft (India) with itself and the demerger of the engineering business of the company into KPIT Engineering. The latter, a wholly-owned subsidiary of the company, will be renamed KPIT Technologies. Post the merger, KPIT Technologies will hive off its information technology business into a separate entity, which will operate under the name of Birlasoft.
Following the deal, promoters of both Birlasoft and KPIT Technologies have made an open offer for 26 per cent stake in the merged company at ₹182 a share. Shareholders of Birlasoft will receive 22 shares of the merged entity for every nine shares they hold currently, while KPIT Tech investors will receive one share (of the combined entity) for each share held in the company.
The combined unit will be a $700-million entity, of which the digital and information technology services company will be worth $500-million, KPIT Technologies said in a statement.
The new KPIT Technologies will be a focussed engineering services company of over $200 million, and which will be created by tapping into the current engineering business of KPIT in automotive engineering and mobility solutions, the statement further added.
Shares of KPIT Technologies, after hitting a year high of ₹223.40 on the NSE, closed at ₹220, up 5.6 per cent, over the previous day’s close of ₹208.40.