Majesco locks in at upper circuit for second consecutive day

The shares of Majesco Limited were locked in at an upper circuit band of five per cent at Rs 421.20 for the second consecutive day on Wednesday.

Previously, the board of directors of the company approved to sell its US subsidiary to private equity firm Thoma Bravo. 

As Majesco announced about receiving the approval to sell the company’s entire stake in its US subsidiary for USD 594 million, on Tuesday, the shares of the company locked in at its upper circuit of 5 per cent at Rs 401.15.

As per the agreement, the shareholders of Majesco will be entitled to receive USD 13.10 in cash for each share of Majesco common stock upon the closing of the transaction. The price represents a premium of approximately 74 per cent over Majesco’s average closing price during the 30-trading day period ended July 17, 2020. The completion of the divestment is subject to approval from the shareholders.

The total consolidated income of Majesco Ltd for FY20 was Rs 1,062.20 crore of which, 99.04 per cent was contributed by the US Subsidiary.

Majesco provides technology, expertise and leadership that helps the insurers to modernise, innovate and connect to build the future of their business as well as the future of insurance at speed and scale.

Thoma Bravo LP is a leading private equity firm, focussed on the software and technology-enabled service sectors. Thoma Bravo LP partners with a company’s management team to implement operating best practices and invest in growth initiatives as well as to make accretive acquisitions intended to accelerate revenue and earnings, with the goal of increasing the value of the business.

In the past one month, the shares of Majesco gained by more than 20 per cent while post the sharpest drop witnessed on March 23, 2020, the stock price had gained by 127.68 per cent, thus creating value for shareholders’ investments.