ITC Infotech to buy out Soota's 22.1% stake in Happiest Minds for ₹1,330 crore; to be listed soon

Diversified conglomerate ITC Ltd on Monday said its wholly-owned subsidiary ITC Infotech will acquire a 22.1% stake in Happiest Minds Technologies for around ₹1,330 crore, as part of a transaction that will eventually merge the two entities and create an AI-first technology services business targeting $1 billion in revenue by FY28.

The acquisition of 3.36 crore equity shares will be made from Happiest Minds' promoter Ashok Soota and Ashok Soota Medical Research LLP in two tranches, ITC said in a regulatory filing. The ITC Infotech board has also approved a proposed Scheme of Amalgamation under which Happiest Minds will be amalgamated with ITC Infotech. After the merger, ITC Infotech is proposed to be listed on the BSE and NSE.

Following the amalgamation, ITC Ltd will hold 73.4% in the merged entity, while shareholders of Happiest Minds will own the remaining 26.6%. ITC Infotech will fund the stake acquisition through a rights issue.

19,000-plus workforce, stronger US and BFSI presence

The combined entity will have a workforce of over 19,000 professionals and is expected to strengthen ITC Infotech's presence in the US and the Banking, Financial Services and Insurance (BFSI) segment. Healthcare, Hi-Tech and EdTech will also be added to its portfolio.

The proposed merger will bring together ITC Infotech's capabilities in Cloud, Data Analytics, Product Lifecycle Management (PLM), SAP, enterprise transformation and full-stack managed services with Happiest Minds' expertise in Digital Product Engineering, Data, Cybersecurity and specialised AI.

The companies expect the combination to enhance their ability to compete for large transformation-led mandates while creating opportunities for cross-selling and upselling across their respective client bases.

Sanjiv Puri, Chairman, ITC Limited and ITC Infotech, said, "The coming together of our complementary strengths, deep domain expertise and future-ready capabilities will further enhance our ability to deliver cutting-edge solutions across geographies. I am particularly encouraged by the shared values, people and customer-centricity that define our organisations. We look forward to the invaluable experience, expertise and dedication of the employees of Happiest Minds as we embark on this exciting new chapter."

ITC Infotech proposed to be listed on BSE, NSE

The merged entity will offer a full-stack technology proposition spanning Build, Intelligence and Operations, with the companies targeting significant growth from the rising adoption of AI by enterprises.

Ashok Soota, Chairman and Chief Mentor of Happiest Minds, said, "I am delighted that after the completion of legal formalities, Happiest Minds will become an important part of a larger organization through its amalgamation with ITC Infotech." He said the two companies had significant complementarity in their business portfolios and added, "We believe that ITC Infotech is the best partner for Happiest Minds to fulfil its destiny and we are pleased that our team will have a welcoming new home."

Manas Chakraborty, MD & CEO, ITC Infotech, said, "This combination is fundamentally about elevating the value we deliver to our customers." He added that integrating Happiest Minds' Digital Engineering, Data, AI and Cybersecurity capabilities with ITC Infotech's domain expertise, cloud and engineering capabilities would enable the company to serve as a "full stack AI-led transformation partner."

The transaction is subject to customary statutory, shareholder and regulatory approvals, including those from the Competition Commission of India, relevant stock exchanges and the National Company Law Tribunal. The companies expect completion within 15 months and will continue to operate independently until the required approvals are received.