Polaris Tech to list its products business Intellect Design

Written by fe Bureau | Chennai | Updated: Oct 11 2014, 05:37am hrs
Following the decision to demerge its products business into an independent entity, Chennai-based mid-tier IT firm Polaris Financial Technology on Friday announced that the products company, Intellect Design Arena, will be listed in coming weeks.

The services company, without the products division, has started trading on the bourses separately.

Polaris had restructured its business into separate services and products divisions for greater focus and efficiency in May 2013. Subsequently, it announced the demerger of its products (Intellect) business into an independent entity in March 2014 and filed for scheme of demerger.

The scheme of demerger was approved by the regulatory authorities, shareholders, and the Madras High Court on September 14, 2014.

"The record date announced was October 10, 2014, from which date the services business will trade independently as Polaris Financial Technology," the company said in a note to the stock exchanges.

The board of directors of the products company to be listed as Intellect Design Arena will meet on October 15 for allotting shareholders one share of Intellect for every share of Polaris.

"As a consideration for the demerger, which is technically called a vertical split, every shareholder of Polaris Financial Technology will receive one share of Intellect," it said.

The Polaris board has also decided to offer a special option to Intellect shareholders to exchange the shares (should they wish to) allotted pursuant to the demerger against fully secured non-convertible debentures (NCDs). The NCDs will have a face value of Rs 42 with a coupon rate of 7.75% per annum, redeemable at par after 90 days.

Amid reports of the company being put on the block, Polaris had in March announced the demerger of its products business into an independent entity.

The company had then said that the product business would comprise four distinct businesses such as global universal banking, risk and treasury management, global transaction banking and insurance. Polaris will continue to run the services business with a strong vertical and solution focus. The product business is significantly different from the services stream in terms of investments into product development, talent and sales and distribution.