ITC Rises ~3% as ITC Infotech to Acquire Happiest Minds

Shares of ITC rose nearly 3% in morning trade on September 1, emerging among the top gainers on the Nifty 50 after its subsidiary, ITC Infotech, announced an agreement to acquire a controlling promoter stake in Happiest Minds Technologies, followed by a merger of the two IT services companies. Under the transaction announced on August 31, ITC Infotech will acquire a 22.1% promoter stake in Happiest Minds from founder and Executive Chairman Ashok Soota and Ashok Soota Medical Research LLP for a total consideration of ₹1,329.72 crore. The acquisition will be completed in two tranches. In the first tranche, ITC Infotech will purchase 1.675 crore shares, representing an 11% stake in Happiest Minds. In the second tranche, it will acquire another 1.691 crore shares, equivalent to an 11.106% stake. The stake acquisition will be followed by the proposed merger of Happiest Minds with ITC Infotech, subject to statutory and regulatory approvals. The boards of both companies have already approved the draft scheme of amalgamation. Under the proposed share-swap arrangement, shareholders of Happiest Minds will receive 25 fully paid-up shares of ITC Infotech for every 81 shares held in Happiest Minds as of the record date, which is yet to be announced. Following the completion of the merger, ITC Infotech’s shares will be listed on the BSE and NSE. Happiest Minds will cease to exist as a separate entity and will be dissolved without winding up once the scheme becomes effective. The proposed transaction will consolidate the two IT services businesses under ITC Infotech and marks a significant expansion of ITC’s presence in the technology services space.