Mastek Demerger – Special Situation

Hello Advait –

Majesco India holds 69.7% in Majesco US; while Cover-All (now Cover-All shareholders have received Majesco shares) holds 16.5% and Mastek Ltd. owns remaining 13.8%.

So indianivesh has valued the overall Majesco India listed entity at 549 bucks without reducing the shares owned by former Cover-All shareholders (16.5%) and Mastek Ltd (13.8%). So it ignored the fact that Majesco India only owns 69.7% of the Majesco US entity.

So if you reduce the share – then the value of Majesco India (assuming india nivesh’s valuation assumptions) comes to 549 x 69.7% = 382 bucks roughly.

Additionally, Majesco USA is currently trading at 176 Mn USD or roughly 1,164.2 Cr INR. In comparison – India’s Majesco is trading at 967 Cr INR which only holds 69.7% of Majesco USA entity. Implying 19% premium to US entity (after accounting for 69.7% share) when Indian entity is a holding company and should trade at a discount to US subsidiary.

And so probably promoters are buying Majesco US and not Majesco India shares –
http://www.insider-monitor.com/trading/cik1626853.html

Thanks
No holding in any entity