iGate plans to delist Indian arm

iGate Corporation, provider of IT & BPO services, on Wednesday announced its plans to delist its offshore subsidiary in India, iGate Global Solutions, from the National Stock Exchange as well as the Bombay and Bangalore stock exchanges.

The iGate Global Solutions stock closed at Rs 339 on the Bombay Stock Exchange on Wednesday, up 7 per cent over its previous close.

According to a market analyst, the stock's surge in recent days reflected anticipation of a buyout. At its peak on Wednesday, the stock had risen almost 60 per cent from last Thursday's close.

The market expects the share price to be in the range of Rs 400-450 for the buyback.

The delisting is aimed at putting an end to the confusion over two stocks and concentrating more on the North American markets.

"A majority of our clients are in North America. It will be better for us to keep the US listing (Nasdaq). It will create a higher profile for the company and assets for the employees," said iGate Global Solutions CEO Phaneesh Murthy.

iGate Global Solutions can be delisted after iGate and its affiliate iGate Inc acquire over 90 per cent of the company's common stock.

iGate and iGate Inc own 81.1 per cent of iGate Global Solutions. The buyout of the shares (18.9 per cent) is expected to be completed by December if the proposal is approved.

Of the 18.9 per cent shares, 5.7 per cent is held by three institutions, 3.5 per cent by the company's senior executives and the balance is distributed between the employees and the public.

The delisting will be done in accordance with the Sebi guidelines through a shareholder-led reverse book building process. iGate reserved the right not to effect the delisting if the final price was not acceptable to its board of directors, the company said.