Major Deal in India’s IT Services Sector
ITC Infotech and Happiest Minds Technologies have announced a major merger that will create a much larger technology services company with an ambition to become a $1 billion-a-year technology business by FY28.
As the first step in the transaction, ITC Infotech will acquire a 22.1% stake in Happiest Minds from its promoter group for approximately ₹1,330 crore. The stake will be purchased in two tranches at an average price of around ₹395 per share.
The acquisition will then be followed by the merger of Happiest Minds with ITC Infotech through a share-swap arrangement.
How the Merger Will Work
Under the proposed share-swap arrangement, shareholders of Happiest Minds will receive 25 shares of ITC Infotech for every 81 shares of Happiest Minds they own.
Following the merger, ITC Limited is expected to become the promoter of the combined company with approximately 73.4% ownership. The remaining 26.6% will be held by existing Happiest Minds shareholders.
The transaction remains subject to approvals from shareholders, stock exchanges, the Competition Commission of India and the National Company Law Tribunal.
A 19,000-Employee Technology Giant
The combined business is expected to have more than 19,000 employees, serve over 800 customers and operate across more than 30 countries.
The companies believe their businesses are highly complementary. Happiest Minds brings capabilities in artificial intelligence, digital engineering, cloud, data, analytics and cybersecurity, while ITC Infotech has strong expertise in enterprise transformation, SAP, product lifecycle management, Industry 4.0 and industry-specific technology solutions.
Together, these capabilities could give the merged company a significantly broader technology portfolio.
Why ITC Is Making the Move
The merger represents a major expansion of ITC’s technology ambitions. ITC Infotech has already established itself as a technology services business, but combining it with the listed Happiest Minds would significantly increase its scale.
The proposed transaction also gives ITC a stronger presence in high-growth areas such as AI, cloud computing and cybersecurity at a time when businesses globally are increasing technology spending.
Happiest Minds Gets Greater Scale
For Happiest Minds, the merger provides access to the much larger ITC ecosystem and potentially greater resources for global expansion.
Founded by IT industry veteran Ashok Soota, Happiest Minds has built a strong position in digital transformation and engineering services. Becoming part of a larger technology group could allow these capabilities to be combined with ITC Infotech’s enterprise-focused business.
What Happens Next
The two companies will continue operating independently until the necessary approvals are obtained. The transaction is expected to take around 15 months to complete.
Once the merger receives all approvals, the combined ITC Infotech is proposed to be listed on the stock exchanges.
The deal could therefore become one of the most significant consolidation moves in India’s mid-sized IT services sector, while giving ITC a much larger and potentially separately valued technology business.
Summary
ITC Infotech will acquire a 22.1% promoter stake in Happiest Minds for about ₹1,330 crore before merging the two companies. The combined business will have over 19,000 employees and 800 customers and aims for $1 billion in annual revenue by FY28. ITC is expected to hold 73.4% of the merged company, which will eventually be listed.
