KPIT Technologies hits 52-week high post merger announcement with Birlasoft

Reacting to this, the stock of KPIT Tech gained as much as 6.3 per cent to Rs 222 on the BSE. 

KPIT Technologies hits 52-week high post merger announcement with Birlasoft
The combined KPIT-Birlasoft entity will be engaged in the IT business. Image source:
By ZeeBiz WebTeam
Updated: Tue, Jan 30, 2018
11:53 am
ZeeBiz WebDesk
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KPIT Technologies rallied over 6 per cent after it announced that KPIT and the CK Birla Group owned Birlasoft, will work closely to first merge Birlasoft into KPIT and later split the combined entity of KPIT and Birlasoft into two public
companies.

Reacting to this, the stock of KPIT Tech gained as much as 6.3 per cent to Rs 222 on the BSE. 

"The Board has approved a draft composite scheme for amalgamation of Birlasoft (India) with the company and demerger of the engineering business of the company into KPIT Engineering, a wholly owned subsidiary of the company," it said in a regulatory filing.

As per the proposed merger, shareholders of Birlasoft will receive 22 equity shares of the combined KPIT-Birlasoft for every nine equity shares of Birlasoft.

The combined KPIT-Birlasoft entity will be engaged in the IT business.

"The tremendous value created by KPIT will continue in two new avatars and become leading companies in their respective spaces.

"While transitioning the Business IT Services business to Birlasoft in the next year, our team will continue to work with Birlasoft to ensure the best service to the KPIT Business IT customers," KPIT Chairman Ravi Pandit said.

The shares of KPIL Engineering (KEL) will be listed pursuant to the proposed demerger and the shareholders of combined KPIT-Birlasoft will receive one share of KEL for every one share they hold in the combined firm, it said further.

"After the proposed demerger, the existing promoters of the company propose to acquire sole control and substantial shareholding in KEL from the Birlasoft promoters," KPIT Technologies said.

KPIT Technologies provides IT consulting and product engineering solutions to areas like automotive and transportation, consumer and industrial goods.

Part of the old CK Birla Group, Birlasoft provides information technology (IT) services across various verticals.

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