KPIT Technologies stock was down 43 percent in the morning on January 24 as the company demerged its engineering division into a separate entity. Hence, it started trading ex-demerger as January 24 is the ex-date for the same.
The stock was quoting at Rs 148.00, down Rs 69.95, or 32.09 percent on the BSE, at 10:24 hours IST.
To focus on engineering and IT divisions, the company had decided to demerge the engineering business from KPIT Technologies to KPIT Engineering Limited.
"Company made the composite scheme of arrangement amongst Birlasoft (India) Limited and KPIT Technologies Limited and KPIT Engineering Limited and their respective shareholders effective as on January 15, 2019," it said.
It fixed January 25 as the record date for the purpose of identification of shareholders of the company to whom the shares of KPIT Engineering Limited would be allotted. It means every shareholder should have shares of KPIT Technologies in their account to get shares of KPIT Engineering.
As a part of demerger, KPIT Engineering will issue its equity shares to shareholders of KPIT Technologies in the ratio of 1:1.
"KPIT Engineering would achieve listing and all the existing shareholders of the company would be allotted shares in KPIT Engineering in the same proportion in which they hold shares in the company," the IT firm said.
The software firm further said subject to approval of SEBI and stock exchanges, post implementation, equity shares of KPIT Technologies and KPIT Engineering will be listed on BSE and NSE with mirror shareholding.
This scheme of arrangement received approval from the National Company Law Tribunal on December 18, 2018. The appointed date for the demerger was January 1 and the effective date of the scheme was January 15 of this month.
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