Shares of KPIT Technologies plunged nearly 44 percent to hit an intra-day low of Rs 123.10 on Thursday following the demerger of engineering division.

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The stock opened 37.62 percent lower at Rs 135, below its 200-day moving average.The midcap IT stock has fallen more than 37 percent in the last one month and more than 34 percent in last three months.

The shares fell on Thursday as the company demerged its engineering division into a separate entity. Hence, it started trading ex-demerger as January 24 is the ex-date for the same.

Beginning today, KPIT Technologies' shares have started trading without the engineering business, as part of the IT company's complex three-step deal with CK Birla Group's Birlasoft.

Expected to be completed by March this year, the transaction reportedly involves a merger and a subsequent demerger to create two specialized technology companies.

To focus on engineering and IT divisions, the company had decided to demerge the engineering business from KPIT Technologies to KPIT Engineering Limited.

The demerged KPIT Engineering will again be renamed as KPIT Technologies by the second week of February.

Last week, KPIT Technologies reported a 21 decline in its consolidated net profit to Rs 64.93 crore while net sales dipped 6.6 percent to Rs 563.70 crore in the third quarter ended on December 31.

Motilal Oswal has a 'buy' rating on the stock with a price target of Rs 215.

At 11.30 am, KPIT Technologies' shares quoted at Rs 130, down 3.4 percent.

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First Published:Jan 24, 2019 11:42 AM IST