Summary:
ITC is expanding its technology business through ITC Infotech’s proposed acquisition of a 22.1% stake in Happiest Minds for around ₹1,330 crore, followed by a merger through a share swap. The combined entity is expected to have more than 19,000 employees and target $1 billion in annual revenue by FY28. The deal strengthens exposure to AI, cloud, cybersecurity and digital transformation, while the proposed listing of ITC Infotech could unlock value for ITC shareholders.
ITC shares gained sharply while Happiest Minds Technologies came under pressure after ITC Infotech announced a strategic combination with the Bengaluru based technology services company. ITC Infotech, a wholly owned subsidiary of ITC, will first acquire a 22.1% stake in Happiest Minds for around ₹1,330 crore and subsequently merge the two businesses through a share swap. The transaction is expected to create an AI focused technology services company with annual revenue of $1 billion by FY28.
ITC Infotech to acquire 22.1% stake
The first step involves ITC Infotech acquiring 3,36,61,700 shares, representing 22.106% of Happiest Minds’ equity, from founder Ashok Soota and Ashok Soota Medical Research LLP. The consideration is ₹1,329.72 crore, translating to an average price of around ₹395 per share. The acquisition will be completed in two tranches and funded through a rights issue by ITC Infotech.
The second step is the proposed amalgamation of Happiest Minds with ITC Infotech. Under the share swap arrangement, shareholders of Happiest Minds will receive 25 ITC Infotech shares for every 81 Happiest Minds shares held. Following the merger, ITC will own around 73.4% of the combined entity, while existing Happiest Minds shareholders will hold around 26.6%.
Happiest Minds Share Price Ltd
Combined entity targets $1 billion revenue
The transaction will substantially increase the scale of ITC’s technology business. The combined company is expected to have more than 19,000 employees and serve more than 800 customers across over 30 countries. It will target annual revenue of $1 billion by FY28.
For FY26, Happiest Minds reported revenue of around ₹2,315 crore, up 12.3% from ₹2,060.84 crore in FY25. ITC Infotech reported revenue of around ₹4,718 crore, taking the combined FY26 revenue to approximately ₹7,033 crore.
Complementary technology capabilities
The merger brings together two different but complementary technology portfolios. Happiest Minds has capabilities in AI, digital engineering, cloud, data, analytics and cybersecurity, while ITC Infotech has expertise in enterprise transformation, SAP, product lifecycle management, cloud, Industry 4.0 and industry specific technology solutions.
The combined business will also have a broader international footprint, with North America accounting for 38% and Europe 31% of its geographic presence. The companies expect the combination to strengthen their ability to address demand for AI led enterprise transformation.
Also read: ITC Share Price Rallies 4% despite Q1 Profit decline
Why did ITC shares surge?
ITC shares gained as investors viewed the transaction as a strategic diversification and value creation opportunity. The deal gives ITC greater exposure to the fast growing technology services industry without building the entire business organically.
The transaction also provides ITC Infotech with access to a listed platform through the proposed merger. Once approvals are secured, ITC Infotech will be listed on the stock exchanges, effectively providing a public market valuation for the technology business.
Why did Happiest Minds shares fall?
Happiest Minds shares declined despite the merger because the market is assessing the share swap valuation and the implications for existing shareholders. The ₹395 per share acquisition price is also a key reference point for investors, while the proposed 25:81 swap ratio determines how existing shareholders will participate in the merged company.
The transaction remains subject to shareholder, statutory and regulatory approvals, including approvals from the Competition Commission of India, stock exchanges and the National Company Law Tribunal. The companies expect completion within around 15 months.
Outlook
The proposed merger marks a significant expansion of ITC’s presence in technology services and creates a substantially larger platform focused on AI and digital transformation. For Happiest Minds shareholders, the eventual value will depend on the performance of the merged business and the benefits generated from combining the two technology portfolios.
For ITC, the key opportunity lies in turning ITC Infotech into a larger, independently valued technology business while leveraging the scale and capabilities added through Happiest Minds.
