BackMindtree clarifies on reports of merger with L&T Infotech
Bloomberg reported that Larsen and Toubro is weighing a merger between two of its publicly traded software firms Mindtree and L&T Infotech
PremiumMindtree Ltd on Monday clarified on reports of merger with L&T Infotech, saying they are speculative in nature.
"We wish to clarify that news reports of a merger between Mindtree Ltd. and L&T Infotech are speculative in nature. In this regard, 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," the company said.
The share price movement on 18 April was in line with that of industry peers as well as the day’s market indices, it further said. On Monday, Mindtree shares closed 3.27% lower at ₹3,965 apiece on NSE.
Bloomberg reported that Larsen and Toubro is weighing a merger between two of its publicly traded software firms Mindtree and L&T Infotech, as the Indian conglomerate seeks scale to compete with global digital giants.
The boards of Mindtree Ltd. and Larsen & Toubro Infotech Ltd., two software units controlled by the Mumbai-based engineering firm, could consider share swap ratios for the merger as early as next week.
Larsen acquired control of Mindtree in 2019. The conglomerate holds about a 61% stake in the company, which has a market value of $8.3 billion, and has around 74% of L&T Infotech, which has a market capitalization of $13.6 billion, data compiled by Bloomberg show.
Earlier during the Mindtree reported 49% year-on-year growth in March quarter net profit at ₹473 crore as against ₹317 crore in the last year period.
Revenue from operations, meanwhile, rose 37% to ₹2,897 crore as compared to ₹2,109 crore in the corresponding quarter of previous fiscal.
The proposed merger comes as software companies are seeing surging demand from businesses embracing the digitization that accelerated during Covid-19. Large IT outsourcing firms are also expanding into areas such as cybersecurity, automation and machine-learning support, moving beyond lower-margin traditional back-room services.
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