Mastek to demerge, and list, its insurance business

MUMBAI: Mastek is demerging its insurance products and services business into a separate listed entity, to be called Majesco Ltd, to capitalize on the growing opportunity in the US insurance market, the latest in a line of companies to create independent unit to focus on their products business.
Mastek, one of the first IT companies to be listed in the country, has been focusing on growing its insurance vertical with a strong base in products and intellectual property. Last year, it hired Salvatore Abano, with nearly 20 years of experience in IT for insurance companies, as chief of strategy and client servicing in New York and has about 1000 employees with deep domain knowledge of the insurance space

“This is part of Mastek’s continuing endeavour to maximise shareholder value and create a platform for the Insurance products and services business to tap the immense opportunity in the US and Global Insurance market.” S Sandilya, Chairman, Mastek said in a statement.

Mastek shareholders will receive one share of the new subsidiary Majesco, for each share of Mastek that they own. The company said it would look to list Majesco on the Bombay Stock Exchange and the National Stock Exchange.

“We believe Mastek’s insurance vertical demands higher valuation relative to other key vertical and overall business. Mastek’s platform is currently used by over 80 P&C insurance customers successfully. And the company’s has nearly 50% revenue contributed from insurance segment,” Amar Mourya, research analyst with IndiaNivesh said in a note. He added the company expects some corporate action in Mastek – potentially listing the insurance business in the US separately.