Shares of NIIT today touched the 20% upper circuit of 114.50 on BSE in early trade. The surge in NIIT shares comes in the backdrop announcement that Baring Private Equity Asia will acquire 30% stake in NIIT Technologies Limited from NIIT Limited and other promoter entities and make an open offer to public shareholders.

In a late night filing to BSE on Saturday, NIIT Technologies said "funds affiliated with Baring Private Equity Asia (BPEA) have signed definitive agreements to buy about 18.85 million shares" of the company (approximately 30 per cent shareholding) from NIIT Limited and other promoter entities at a price of 1,394 per share. The offer price is a 3.3% premium to the closing price of NIIT Technologies on Friday.

This includes about 14.4 million shares of NIIT Ltd, and about 4.3 million shares held by members of families of NIIT founders Rajendra Pawar and Vijay Thadani.

NIIT Ltd holds about 23% stake, while Pawar and Singh with their families hold around 7 per cent shares in NIIT Technologies.

"The aggregate consideration for purchase of shares from promoter entities is estimated to be approximately 2,627 crore," NIIT Tech added.

The deal will also trigger an open offer under which Baring Private Equity Asia will make an offer to the public shareholders of NIIT Technologies for purchasing up to 26% additional shareholding - taking the total deal value to up to 4,890 crore.

This transaction is conditional upon customary conditions, including receipt of required regulatory approvals, including anti-trust and competition clearances from the Competition Commission of India.

NIIT Technologies Ltd became an independently listed company after demerger from NIIT Ltd in 2004.

At 10:30 am, shares of NIIT were trading at 110.95, up 16.24%. Meanwhile, NIIT Tech shares were down 3% at 1,312.

Domestic brokerage Motilal Oswal has a neutral rating on NIIT Tech with a target price of 1,400.

“Based on our FY19/20/21 Earnings estimates of 66.2/74.5/89.9, the deal price implies PE multiple of 21.1/18.7x/15.5x. In fundamental terms, we believe there is limited room for error at these valuations for the company, which also drove our neutral stance," the brokerage said in a note. (With Agency Inputs)