The biggest merger in the Indian Information Technology (IT) sector has received approval from the Securities and Exchange Board of India (SEBI). L&T Infotech and Mindtree announced their plans for the merger in May 2022.
The merged entity will get the name ‘LTIMindtree’ and will be listed on the Indian stock exchanges on November 24th, while the shares of Mindtree will be delisted. It started operating as a merged entity on November 14th, 2022.
LTIMindtree will become the fifth-largest IT services company in India in terms of current market capitalization. As of November 15th, L&T Infotech has a market capitalization of Rs 90,089 Crores while Mindtree has a market cap of Rs 61,288 Crore.
As part of the merger, all Mindtree shareholders will be issued shares of LTIMindtree at a ratio of 73 shares of LTIMindtree for every 100 shares of Mindtree. The Record Date to determine the eligible shareholders of Mindtree for the issue of equity shares of LTI pursuant to the scheme is fixed as November 24, 2022. The parent company, L&T Infotech will hold 68.73 percent of the merged entity.
The shares of Larsen & Toubro Infotech Limited were trading marginally lower at Rs 5,133 levels on Tuesday afternoon. While the shares declined by 1 percent to trade at Rs 3,722 levels.
“LTI can benefit from Mindtree’s strength in the experience layer of digital and addressing CMO budgets while the latter can benefit from the former’s strength in packaged applications. Overlap among key clients is minimal ensuring no turf wars. Our revenue growth estimates already bake in certain synergy benefits,” Kotak Institutional Equities said.
Written by Anoushka Roy
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