Shares of Majesco closed at the upper circuit of 5 per cent at ₹401.15 on the BSE, as it's getting windfall gains from the sale of its US subsidiary.

The US arm of Majesco Ltd on Monday signed a definitive agreement to be acquired by Thoma Bravo, L.P, a PE firm, in a transaction valuing the company at $594 million (approximately ₹4,500 crore).

Following this, the Nasdaq-listed Majesco will operate as a privately held company.

The board of the directors at its meeting on July 20 approved the sale of the company’s entire stake/ investment in the US subsidiary pursuant to the merger, subject to the approval of the shareholders of the company and other regulatory and statutory approvals, as may be required, the company said in a filing to the exchanges, Majesco Ltd said in a notice to the stock exchanges.

As on date, Majesco holds 3.21 crore common stock of the US subsidiary. According to it, the US subsidiary trades at a significant premium of 74 per cent to the company's market capitalisation.

As on July 17, 2020, the value of the company’s entire stake in the US subsidiary was $245.33 million (₹1,840 crore), compared to the total market capitalisation of the company in India of $141 million (₹1,050 crore). This implies a premium of 74 per cent over the market capitalisation of the company in India. The gross value to be received by the company for its stake in US subsidiary in the merger is $420.66 million (₹3,155 crore), compared to the total investments made by Majesco in US subsidiary of $68.67 million (₹515 crore), to date.

Due to the divestment of its US subsidiary. Promoters will distribute the entire proceeds (post taxes etc) to the shareholders in the form of buyback/dividend, expect marketmen, said PhillipCapital, in a note.

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