L&T merges IT subsidiaries with LTI Mindtree

Mumbai, November 14

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The L&T Group on Monday announced operationalisation of the merger of Mindtree with LTI (Larsen & Toubro Infotech), creating the country’s sixth largest software firm with a revenue of $5.25 billion this year, and the new entity, LTI Mindtree, will begin trading from November 24.

Announcing the merger with immediate effect, group chairman AM Naik said LTI Mindtree will be the fifth largest software company in terms of market capitalisation (Rs 1.53 lakh crore of Monday closing).

Merger scheme

• Under the merger scheme, wherein Mindtree will cease to exist, a Mindtree shareholder will get 73 LTI shares for every 100 share he/she owns and the record date for share allocation is November 24
• It will have 90,000 employees on its rolls, taking the overall headcount of the software businesses to 1.2 lakh, spread in over 30 countries across five continents

It will have 90,000 employees on its rolls, taking the overall headcount of the software businesses to 1.2 lakh, which includes that of LTTS, spread across in over 30 countries across five continents.

The new company will be headquartered in Mumbai, and will be independent of L&T, which will also mean that the head of the new entity will not be on the Board of L&T, said Naik, who is the chairman of the new entity while L&T chief executive SN Subrahmanyan will be vice-chairman.

Naik also said, L&T will continue to hold 68.73% in the merged entity.

At the current market value on Monday closing, the new entity will have an m-cap of Rs 1,52,672.23 crore, placing it much ahead of Tech Mahindra and closer to Wipro.

Of the current m-cap, LTI’s share is Rs 90,527.45 crore, after closing over 2% up at Rs 5,161.20 on the BSE, and that of Mindtree is Rs 62,144.78 crore, after gaining nearly 3% at Rs 3,766.35.

As against this, the industry leader TCS commands a market value of Rs 12.2 lakh crore, followed by Infosys at Rs 6.66 lakh crore, HCL (Rs 2.98 lakh crore) and Wipro (Rs 2.17 lakh crore) and Tech Mahindra at a low Rs 1.03 lakh crore.