Mastek tanks 67%, stock adjusts for insurance biz demerger

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26 Aug, 2025 12:21

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Shares of Mastek plunged 67.5 percent intraday Friday as the stock adjusted for demerger of its insurance business. Hence, the listed entity will have the services business and insurance business transferred to its subsidiary Majesco.

Accordingly, every shareholder of Mastek will get one share in Majesco that will be listed on NSE and BSE by July. The strategy behind demerger is to basically focus on insurance business.

"We hope to list Majesco on NYSE by August, said Farid Kazani, MD, Majesco. Post acquisitions, revenues of Majesco US will be USD 105 million and Majesco will get to double digit EBITDA in 3 years, he added. Company's customer base is at 150 clients.

Majesco is the parent company which will have insurance business in India, but most of its value will be derived from its subsidiary Majesco US. Majesco US will be listed on NYSE post the integration of Cover-All Technologies that was acquired in December 2014.

Post-merger with Cover-All, Majesco India will hold 69.7 percent of the Majesco US, and Mastek UK will have 13.8 percent shareholding in Majesco US and rest (16.5 percent) will be with Cover-All shareholders.

Insurance business acquired two companies recently - Agile (having USD 9 million in revenue with 20 clients and 50 employees and NYSE-listed Cover-All Technologies (having sales of USD 20 million with 30 clients and 150 employees. Cover-All provides solutions to the property and casualty insurance sector.

Majesco's operating revenue stood at Rs 499.3 crore in financial year 2014-15 against Rs 507 crore in previous year and operating margin dropped to 2.1 percent from 5.9 percent during the same period.

At 10:12 hours IST, the scrip of Mastek was quoting at Rs 149, down Rs 288.80, or 65.97 percent on the Bombay Stock Exchange.

Posted by Sunil Shankar Matkar