Winning Bizness Desk

Mumbai. Engineering firm Larsen & Toubro Limited (L&T) has announced the merger of its two publicly traded software firms Mindtree Limited and L&T Infotech Limited (LTI). This deal will be completed in 9 to 12 months. The name of the new firm will be LTIMINDTREE. For 100 shares of Mindtree, 73 shares of LTI will be received. LTI MD Sanjay Jalona will resign. Though the decision to resign has been taken due to personal reasons, Mindtree CEO and MD Debashis Chatterjee will take over the work of the new company.

Both are subsidiary companies of L&T

Both LTI and Mindtree are subsidiary companies of engineering firm L&T. L&T had acquired control of Mindtree in 2019. The group holds about 61% stake in the company and has a market cap of around Rs 65,285 crore. The firm holds around 74% stake in LTI. Its market cap is 1.03 lakh crores. After the merger, the turnover of the company will be $ 350 million and L&T's stake will be 68.73%.

To become the 5th largest IT company of the country

In terms of market capitalization, the new firm will overtake Tech Mahindra to become the fifth largest IT service provider in the country. The firm will employ over 80,000 people, including 4,000 sales and support personnel. Currently, TCS ranks first among the IT firms with the highest market valuation. It is followed by Infosys, HCL Tech, Wipro.

Win-Win for All

Speaking on the merger, AM Naik, Chairman, L&T Group said, “This merger represents our commitment to grow the IT Services business in line with our strategic vision. The merger of LTI and Mindtree will be beneficial for customers, investors, shareholders and employees. The new firm will also be able to bid for bigger deals.