Larsen & Toubro Infotech, Mindtree become one merged entity

The merger of Larsen & Toubro Infotech (LTI) and Mindtree, which was announced in May this year, has received the final go-ahead from the Mumbai and Bengaluru benches of the National Company Law Tribunal (NCLT), paving the way for the two entities to start operating as one merged entity from today onwards. 

While announcing the latest development, L&T Group Chairman A M Naik, who is also the chairman of LTIMindtree – the new name of the merged entity – highlighted the fact that the company will become the fifth-largest IT services company of India in terms of market capitalisation. 

“The highly complementary strengths of LTI and Mindtree make this integration a win-win proposition for all our stakeholders – clients, partners, investors, shareholders, employees and community – furthering L&T’s tradition of innovation, excellence, trust and empathy,” he said. 

As part of the merger, all shareholders of Mindtree will be issued shares of LTI in the ratio of 73 shares of LTI for every 100 shares of Mindtree, which will eventually get delisted. The record date for ascertaining all eligible shareholders has been fixed as November 24. 

Meanwhile, parent company L&T will continue to hold 68.73 per cent stake in the merged entity. The combined entity has over 700 clients with a workforce of around 90,000 people. 

At the time of announcing the merger in May, L&T had stated that “significant scale benefits are anticipated” through LTI and Mindtree’s complementary strengths resulting in a stronger portfolio of offerings across verticals. 

“This merger represents our continued commitment to grow the IT services business in line with our strategic vision,” Naik had said in May while adding that the share of IT services – along with some IT-related businesses — would be a minimum of 40 per cent while the other 60 per cent will be from normal businesses over the next 2-3 years. 

Shares of LTI gained a little over two per cent on Monday to close at Rs 5,161.20 while Mindtree stock was up 2.81 per cent to end the day at Rs 3,766.35. 

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