After the merger of HDFC Bank and HDFC, the street might witness another merger of two major companies in the information technology (IT) industry, Mindtree and L&T Infotech (LTI) of Larsen & Toubro.
L&T is considering a merger of its publicly traded IT companies, said a report by The Economic Times.
L&T acquired Mindtree in 2019 by claiming over 60% stake in the Bengaluru based technology services and consulting company.
Mindtree has a market capitalisation of ₹64,165 crore while LTI has a market cap of ₹1.01 lakh crore. Combining both the firms would make an entity worth around ₹1.65 trillion (around $22 billion).
Currently, TCS ranks first among IT firms with the highest market valuation. If the Mindtree-LTI merger takes place, the new entity will join bigwigs like TCS, Infosys, HCL Tech and Wipro.
Tech Mahindra, which is currently the fifth-largest IT company in India, will be out of the top five if the merger goes through.
For now, though, Mindtree has refuted the merger reports, in an exchange filing.
“We would like to state that there is no information available with the Company as of today, which is required to be reported under extant SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and which may have a bearing on the stock price of the Company,” said a statement by Mindtree on April 18.
Meanwhile, Mindtree reported strong March quarter earnings at a time when IT giants like Infosys reported poor numbers and high employee attrition rates.
The net profit of Mindtree zoomed nearly 50% on year to ₹473 crore in Jan-Mar. Also, the company is considering a final dividend of ₹27 per equity share for FY22. Business Insider