Mumbai/Bengaluru, Feb. 4 -- Information technology (IT) firm Zensar Technologies is in talks to acquire an 18-20% stake from promoters of mid-sized peer Mastek, three people familiar with the matter told Mint. The proposed transaction is expected to be valued at over $200 million and could go up to $400 million, though discussions are ongoing and no deal has been finalized, the people added. The promoter stake sale in Mastek, which has been in the works for some time, is contingent on both sides agreeing on the company's enterprise valuation, one of the people quoted above said. "The promoters have been wanting to sell for a while now, but, as per their current expectations, the deal could value the company at almost double its current market capitalization," the person added. Mastek currently has a market capitalization of Rs.6,429 crore. Founder Ashank Desai is the company's single-largest individual shareholder, holding about 10.95% of the shares, while chief executive Umang Nahata owns around 5.48%. If the stake sale goes through, it could lay the groundwork for a potential merger, which would create a new entrant in Indian IT's $1 billion revenue club. Zensar and Mastek ended last year with revenues of $624 million and $408 million, respectively. To be sure, IT sector valuations peaked in 2021-22 amid pandemic-led digital transformation and easy global liquidity, prompting companies such as Wipro to pay premium prices for assets such as UK-based Capco. Public market multiples also expanded sharply as investors chased growth. Since then, valuations have corrected as interest rates rose, deal-driven demand normalized, and clients cut discretionary technology spending, pushing the sector closer to historical averages. Consulting firm EY is advising Zensar on the deal, the people quoted above said....