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Informist, Monday, Aug. 31, 2026

 

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--ITC: Expect $1 bln revenue from ITC Infotech FY28 post Happiest Minds merger
--ITC: Arm ITC Infotech to list post merger with Happiest Minds
--Happiest Minds to merge with ITC arm ITC Infotech
--ITC arm to buy 22.1% stake in Happiest Minds for INR 13.30 bln in cash

 

HYDERABAD/MUMBAI – ITC Infotech Ltd., a wholly owned subsidiary of ITC Ltd., and Happiest Minds Technologies Ltd. Monday announced a strategic merger plan to create a global technology services company, with the combined entity targeting revenues of $1 billion by the financial year 2027-28 (Apr-Mar).

The board of ITC Infotech approved the acquisition of 22.1% stake in Happiest Minds from promoter Ashok Soota and promoter group Ashok Soota Medical Research LLP. for INR 13.3 billion, in two tranches under a share purchase agreement, ITC said in a press release. Under the first tranche, the promoter of Happiest Minds will sell 11% stake in the company for INR 390 per share, a discount of over 4% to the stock's current market price. The remaining 11.1% will be sold for INR 400 per share, which is a near 2% discount to the stock's current market price. ITC Infotech will fund this acquisition entirely through a rights issue to its parent.

 

The rest of the amalgamation will be completed through a share-swap arrangement under which ITC Infotech will issue and allot 25 fully paid-up equity shares of face value INR 10 each of ITC Infotech for every 81 fully paid-up equity shares of INR 2 each held by shareholders of Happiest Minds on the record date. This values Happiest Minds at INR 61.67 billion, or at INR 405 per share, comparable to the company's current market capitalisation. After the merger, ITC will hold 73.4% stake in the combined entity, the promoters of Happiest Minds will hold 7.6%, and its public shareholders will own 19% in the combined entity. The proposed transaction has been endorsed by ITC's board.

The companies expect to complete the transaction within 15 months and will continue to operate independently until all approvals are received. The merged entity will be listed on both the National Stock Exchange and BSE, ITC said. It expects the deal to get final approval from the National Company Law Tribunal and to list ITC Infotech on the exchanges by the September or December quarter of FY28.

 

The amalgamated entity will bring together ITC Infotech's capabilities in cloud, data analytics, product life cycle management, SAP, enterprise transformation, industry-specific technology solutions, and managed services with the expertise of Happiest Minds in digital product engineering, data, cybersecurity, and artificial intelligence, ITC said. The combined company will have a global workforce of over 19,000 professionals and a stronger presence in the US, focused on the banking, financial services, and insurance sector. 

 

The acquisition will be accretive to ITC Infotech's earnings-per-share by the first full year of amalgamation, ITC said in an investor presentation. The merger will generate a revenue synergy of around 10% and a margin expansion of around 1% for ITC Infotech, according to the presentation. Bigger transformation-led contracts, cross-selling, and upselling will help revenue synergy. Increased utilisation, more efficient delivery, and general and administrative expense reduction will help reduce costs, ITC said.

 

The merger will help ITC Infotech expand its footprint in the US and its parent expects revenues from the Americas to double. Currently, ITC Infotech draws 27% of its top line from the Americas and Happiest Minds makes 59% of its total sales in the region. After the merger, 38% of the total revenue from the combined entities will be from the Americas. Europe is expected to account for 31% of the total revenue while India and the rest-of-the-world region will account for 17% and 15%, respectively. The combined entity will have a strong presence in BFSI, health care, and educational technology, ITC said.

Happiest Minds had reported a net profit of INR 676 million for the June quarter, up nearly 11% on quarter. Net revenues rose 4% to INR 6.29 billion. Monday, ITC shares ended at INR 255.50 apiece on the NSE, down nearly 4% from Friday. Happiest Minds shares ended nearly 0.3% lower at INR 406.95.  End

 

US$1 = INR 95.16

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Narayana Krishna and Eshitva Prakash

Edited by Shubhayan Bhattacharya

 

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