Mindtree, L&T Infotech Will Merge To Become India’s 5th Biggest IT Company With Rs 45,000 Crore Revenues

On November 14, L&T Infotech and Mindtree received merger approval.

L&T Infotech and Mindtree Merger 

They will begin operating as a merged entity soon and  become the country’s fifth-largest IT provider by market capitalization and sixth-largest by revenue. 

So far, this is one of the largest mergers in the Indian information technology (IT) domain.

This newly formed combined entity after the merger will be known as LTIMindtree.

How Does This Help?

Both parties in this deal will benefit from scale further allowing it to pursue larger outsourcing contracts as clients look to consolidate vendors in an increasingly challenging macro environment.

While talking about the latest development on the merger, L&T Group Chairman, AM Naik said that the merger has been approved by the National Company Law Tribunal’s (NCLT) Mumbai and Bengaluru benches in separate orders.

According to Naik, the merged entity, along with L&T Technology Services (LTTS), will generate $5.6 billion in revenue this year. 

When it comes to LTIMindtree alone, it is expected to generate $5 billion in revenue next year, Naik claims.

After the completion of the merger, Mindtree will be delisted from stock exchanges.

Afterwards, LTI will be rebranded as LTIMindtree effective November 24, according to  Vinit Teredesai, the combined entity’s Chief Financial Officer.

Naik further said that the merger will help L&T in achieving its goal of increasing IT-enabled services to 25 percent of the company’s total business by 2026. 

Adding, “It might be even higher when it comes to market cap.”

Basically, this entity is uniquely positioned to combine and scale by competing for larger deals, and offers greater ability to stick together for end-to-end offerings and deeper engagement with hyperscalers to generate significant value, Naik said.

Great Future Ahead 

In the next five years, LTIMindtree hopes to go from good to great, with double-digit growth rates, he added.

Here it is noteworthy that LTIMindtree and LTTS will continue to operate independently despite being part of the L&T Group.

First, the merger of the two L&T software units was announced on May 6 and it was expected to be completed by the end of the year. 

At present, L&T Limited  owns 68.73 percent of LTI. 

After this implementation, Mindtree shareholders will be issued LTI shares at a ratio of 73 LTI shares for every 100 Mindtree shares.

As of September 30, 2022, the companies had a combined headcount of 89,271.