The share prices of ITC, one of India’s largest FMCG companies, and Happiest Minds Technologies, an IT company, witnessed contrasting movements on Tuesday (September 1), after ITC’s subsidiary announced plans to merge with Happiest Minds Technologies.
On Monday, ITC Infotech will merge with Bengaluru-based Happiest Minds Technologies to create an AI-first enterprise with a USD 1 billion turnover by FY28.
ITC Infotech-Happiest Minds Deal structure
ITC Infotech will acquire a 22.1 per cent stake in Happiest Minds for cash. The transaction will be completed in two tranches, with 11 per cent being acquired at Rs 390 per share and the remaining 11.1 per cent at Rs 400 per share. The total consideration is Rs 1,330 crore and will be funded through a rights issue by ITC Infotech.
In the second step, Happiest Minds will merge into ITC Infotech. Shareholders of Happiest Minds will receive 25 ITC Infotech shares for every 81 Happiest Minds shares, implying a value of Rs 405 per Happiest Minds share.
The third step will involve the listing of ITC Infotech on stock exchanges.
ITC Infotech-Happiest Minds Deal: Valuation and Ownership
Happiest Minds has an approximate value of Rs 6,200 crore, while ITC Infotech is valued at about Rs 11,900 crore. Their combined value is estimated at around Rs 18,100 crore.
Before the merger, Happiest Minds promoter Ashok Soota holds about 44 per cent, while public shareholders own around 56 per cent.
Following the transaction, the ITC Group is expected to hold about 73.4 per cent of the combined entity, with Happiest Minds promoters holding 7.6 per cent and its public shareholders owning 19 per cent.
ITC Infotech-Happiest Minds Deal: Revenue and scale
The combined entity reported FY26 revenue of about Rs 7,171 crore, comprising Rs 2,315.11 crore from Happiest Minds and Rs 4,856 crore from ITC Infotech. Combined EBITDA stood at Rs 1,302.24 crore, with a margin of 18.16 per cent, while PAT was Rs 722.62 crore.
Additionally, Happiest Minds has reaffirmed FY27 constant-currency revenue growth guidance of about 12.5 per cent year-on-year and has an aspirational FY28 growth target of 15 per cent. Its Q1 FY27 revenue rose 14.3 per cent year-on-year to Rs 628.5 crore.
ITC Infotech-Happiest Minds Deal: Other Details
The combined entity is expected to cross the USD 1 billion scale threshold, double its Americas footprint and deepen its presence in BFSI while adding Healthcare and EdTech capabilities. The deal also aims to strengthen its AI proposition and enable cross-selling across distinct client bases.
The combined talent pool will include more than 8,200 product engineers, 1,400 data specialists, 9,000 AI-trained employees and over 400 cybersecurity professionals. The build-to-run ratio is expected to move to 50:50.
(Disclaimer: The above article is meant for informational purposes only and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
