India-based staffing firm Quess Corp. announced a three-way demerger of its diversified businesses.

On Friday, the group’s board of directors approved a composite scheme of arrangement providing for the demerger of Quess Corp into three independent entities.

The demerger will ultimately result in three separate listed companies, namely: 1. Quess Corp Ltd: Workforce Management (the remaining company) 2. Digitide Solutions Ltd: BPM solutions, Insurtech and HRO business (the first new company) 3. Bluspring Enterprises Ltd: Facility Management, Industrial Services and Investments (the second company).

Digitide will provide a comprehensive suite of solutions, including BPM (business process management) solutions, Insurtech and HRO business. The core strategy involves harnessing technology to enhance client productivity and ensure optimal efficiency in their business processes.

The services under the Bluspring Enterprises entity will include facility management and security services (man-guarding and tech-guarding), telecom infrastructure maintenance, and industrial services. Additionally, Quess’ investment in foundit, a white-collar job portal and candidate services platform under Bluspring Enterprises Ltd., will experience a significant uptick, driven by its futuristic AI technology-driven platform, according to the group.

Quess Corp. said the three entities are “ideally placed to capitalise on India’s growth trajectory as the country marches towards a USD 5 trillion economy.”

According to the company, the rationale for the demerger is to simplify corporate structure by separation of scaled platforms into independent entities, each with a strong market positioning. Furthermore, the group said the demerger will enhance strategic clarity and management focus to accelerate profitable growth.

The demerger will also allow for an optimal capital allocation strategy for each entity to invest behind its strategic priorities and flexibility for each entity to pursue independent and differentiated strategies to drive value creation, as well as the ability for each entity to create a compelling investor proposition and attract investors.

Once the demerger comes into effect, all shareholders will receive one additional share for each of the new companies, for every share held in Quess Corp. This process of demerger is expected to take between 12-15 months, to achieve regulatory clearances.

Chairman Quess Corp Ajit Isaac said, “This is a landmark moment for Quess and is a transformational decision to create three separate entities. It helps the management to focus, develop capital allocation plans relevant to each business, and create value for our shareholders. The decentralised structure at Quess has enabled a pathway for the three demerged entities to continue a culture of entrepreneurship, an employee-friendly workplace with customer centricity being at the core of our purpose. We believe that the heavy lifting to create these entities has been done and it is now time to unlock value through this demerger.”

Chairman and CEO of the staffing firm’s largest shareholder Fairfax Financial Holdings Ltd., Prem Watsa said, “I am delighted with the decision of the Board of Quess Corp Ltd. to demerge into three separate entities. Each of these entities will be a market-leading player with the ability to leverage opportunities that come their way through its renewed focus.”

“From the time we initially invested in Quess Corp Ltd., in 2013, the company has become one of the largest domestic employers in India and has the potential to develop as a significant business services player on a global scale. We are confident that this strategic initiative will benefit all shareholders and ensure that the management team gets the support to achieve the set-out goals from the demerger,” Watsa said.

Following news of the demerger, Quess Corp Ltd (QUESS:NSI) set a new 52-week high during today's trading session when it reached INR 582.00 (USD 7.01). Over this period, the share price is up 44.12%. The company last traded at INR 540.60 (USD 6.51), up 7.82% on the day. The company has a market cap of INR 73.18 billion (USD 881.47 million).