Will Polaris sell its IT Services arm to NEC?

Chennai based BFSI products and services company - Polaris Financial Technologies has been trying to sell off its services arm for a while. According to a latest report in CNBC-TV 18, it said that NEC is at the threshold of entering into an agreement with Polaris in acquiring its services arm.

A Polaris spokesperson refused to comment on the development when contacted by DATAQUEST and said that the company does not comment on market speculation.

But the fact is since the last one year; Polaris is trying to sell off its services division and wants to retain its products branded on ‘Intellect Suite'. In May of this year it was rumored that companies like HCL tech, Wipro and L&T Infotech and any one of them might acquire Polaris's services arm and the valuation given at that time was about $ 330 mn. When the company's CEO Arun Jain was specifically asked about this, he denied it completely at that time.

But with the latest development, it looks like Polaris is on the verge of sealing a deal. But over the last few months post the speculation, the company seems to have downgraded its valuation to about $ 200mn ( Rs 1,250 crore) - but this was higher than company's overall valuation- about Rs 1,250 crore.

With industry analysts still finding the $ 200 mn valuation on the higher side- can Arun Jain pull this deal in his favor?