There is going to be a big change in the IT industry. Actually, a merger has been announced between L&T Info and Mindtree. The merger will result in the creation of a large IT services company with combined revenues of $3.5 billion.
What will be the name of the company: The new company formed after the merger will be named ‘LTI Mindtree’. In a purely share-based transaction, 73 L&T Info shares will be issued for every 100 shares of Mindtree. The new shares of L&T Info issued will be traded on NSE and BSE.
Post-merger, Larsen & Toubro Limited Group will hold 68.73 per cent stake in L&T Info. The group currently holds around 61% stake in Mindtree and about 74% in L&T Infotech. However, the merger is still subject to the approval of the shareholders and regulator. The complete merger process is expected to take place in 9-12 months.
Let us inform you that recently, Mindtree’s fourth quarter net income grew by 49% to Rs 473 crore, while L&T Infotech’s net profit stood at Rs 637 crore, a growth of 17%.
DC Chatterjee will take over the command: The merged company LTI Mindtree will be headed by DC Chatterjee. Meanwhile, Sanjay Jalona, Chief Executive Officer (CEO) of L&T Info has resigned from the company citing personal reasons.
Here’s the condition of the stock: On Friday, the last trading day of the week, L&T Info’s stock is down 3.69 percent at Rs 4,584. At the same time, talking about Mindtree, it fell 3.79 percent to Rs 3,380.
Tough competition in IT sector: The merger is taking place at a time when software companies are pushing businesses to embrace the digitization accelerated during COVID-19. Large IT outsourcing firms are also expanding into areas such as cyber security, automation and machine-learning support.
IT sector companies including Tata Consultancy Services, Infosys and Wipro are investing heavily in services like cloud infrastructure and data analytics by bagging large contracts. Let us tell you that in the financial year 2012, India’s tech industry reached a revenue of more than 220 billion dollars.
What did the chairman say: AM Naik, Chairman, L&T Info said, “The business of L&T Info and Mindtree complement each other. As such, this merger will be of great benefit to our customers, investors, shareholders and employees.