L&T Announced Merger of L&T Infotech and Mindtree

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L&T Announced Merger of L&T Infotech and Mindtree
07 May 2022
4 min read

News Synopsis

Larsen & Toubro announced on Friday the merger of two public IT services companies, L&T Infotech and Mindtree. This process is expected to be completed by the end of this fiscal year. An integrated entity named LTIMindtree has access to large transactions and is more likely to compete with large companies, said top L&T executives.

LTIMindtree will be the sixth-largest IT player in India, after TCS, Infosys, HCL Technologies, Wipro, and Tech Mahindra in terms of revenue and profit. 

The stock prices of both companies fell as the merger hype became stronger all day long. At the closing price on Friday, LTI shares were down 3.64% from the previous closing price to Rs 4,593 per share, while  Mindtree shares were settled at BSE down 3.88% to Rs 3,374.65.

The merger recognizes that technology spending and customer demand are skyrocketing as IT services companies embrace digital transformation. For L&T, this merger fits in with the group's vision of being more focused on services. The merger has business synergies because the two companies have complementary portfolios.

One thing that works is the talent-based size of the integrated entity. The merged company will employ a total of more than 81,000 people. A M Naik, group chairman, L&T, was convinced that the merger would also reduce sales.

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