Polaris demerges product biz, plans to list it as a separate entity

Every shareholder of company will get one share of Intellect Design

Polaris Financial Technology has demerged its product business. The company said its services business will trade as Polaris Financial Technology, while its products business will be listed as a separate entity.

Arun Jain, chairman, Polaris Financial Technology, said the services business had been listed on Friday.

“It’s a major step in the journey of Polaris, where the services company created one of the largest intellectual product lines for retail banking, capital markets, global transaction banking and insurance space by investing over Rs 1,000 crore (Rs 100 crore per year) in 10 years,” he said.

Jain added Intellect Design Arena Limited (the products business), which has 200 banks as clients, could take care of itself in terms of investments and growth.

“Now, the next step is listing of Intellect Design Arena independently in the coming weeks,” said Jain.

S Swaminathan, chief financial officer, Polaris Financial Technology, said by next month-end, Intellect Design Arena was expected to be listed and the paid-up capital will be the same as Polaris’s, Rs 50 crore.

He said the product business in 2013-14 had clocked $90 million and was expected to grow 15 per cent in 2014-15. The services businesses, which reported flat growth in the first quarter, is expected to get on the growth path from the second quarter.

Polaris had restructured its businesses into services and products divisions for greater focus and efficiency in May 2013 and it announced the demerger in March 2014.

The board of directors of the products company will meet on Wednesday to allot one share of Intellect for one share of Polaris. “Every shareholder of Polaris Financial Technology Limited will receive one share of Intellect,” said a spokesperson of the company.

The Polaris board, taking into consideration the views of a panel comprising independent directors and an audit committee, has decided to offer an option to the shareholders of Intellect to exchange the shares allotted with fully secured non-convertible debentures (NCDs).

These NCDs shall have a face value of Rs 42, with a coupon rate of 7.75 per cent a year, redeemable at par after 90 days.

The company will file the Information Memorandum before October 24, 2014 post which the Products company, Intellect Design Arena Limited, will be listed in coming weeks.