ITC Infotech is set to acquire a 22.1% stake in Happiest Minds Technologies for around ₹1,330 crore before merging the Bengaluru-based technology company with itself. The proposed transaction will create a larger technology services business with more than 19,000 employees and a target of reaching $1 billion in annual revenue by financial year 2028.
The deal marks a major consolidation in India’s information technology sector, as companies increasingly look to build scale and strengthen capabilities in areas such as artificial intelligence, cloud computing, cybersecurity, data analytics and digital engineering.
Under the agreement, ITC Infotech, a wholly owned subsidiary of ITC Ltd, will purchase 3,36,61,700 shares of Happiest Minds, representing 22.106% of the company’s paid-up equity capital. The shares will be acquired from Happiest Minds founder and promoter Ashok Soota and Ashok Soota Medical Research LLP.
The purchase will be completed in two tranches, with the total consideration amounting to approximately ₹1,330 crore. The acquisition will be funded through a rights issue by ITC Infotech.
The stake purchase is only the first stage of the proposed transaction. Once the acquisition is completed, Happiest Minds will be amalgamated into ITC Infotech under a scheme of arrangement. The merger will require approvals from shareholders, regulators, stock exchanges, the Competition Commission of India and the National Company Law Tribunal, among others.
Under the proposed share-swap arrangement, Happiest Minds shareholders will receive 25 fully paid-up shares of ITC Infotech for every 81 shares of Happiest Minds held by them on the relevant record date.
Following the merger, ITC Ltd is expected to become the promoter of the combined company with a stake of about 73.4%. Existing Happiest Minds shareholders will hold the remaining 26.6%.
The merged entity is also expected to be listed on the BSE and NSE. This will give ITC Infotech, which is currently unlisted, a direct presence in India’s public equity markets.
The combined business is expected to generate around ₹7,033 crore in revenue and employ more than 19,000 professionals. It will serve customers across India, the United States, Europe, the Middle East and the Asia-Pacific region.
The companies are positioning the proposed business as a technology services enterprise with a strong focus on artificial intelligence. Its offerings are expected to cover digital transformation, cloud computing, cybersecurity, data analytics and software engineering.
The combination brings together different strengths. ITC Infotech has an established presence in enterprise technology services, including cloud, SAP, product lifecycle management, Industry 4.0 and industry-specific technology solutions.
Happiest Minds, meanwhile, has built its business around digital transformation, product engineering, artificial intelligence, cloud technologies, cybersecurity and data services. Its capabilities are expected to complement ITC Infotech’s existing technology portfolio.
The merger could strengthen the combined company’s presence across sectors including banking and financial services, healthcare, manufacturing and high technology. A wider portfolio could also allow the company to pursue larger technology contracts and offer customers more integrated services.
For Happiest Minds, the transaction represents a significant development in the company’s journey since it was founded by Ashok Soota in 2011. The veteran technology entrepreneur’s promoter group is set to sell its 22.1% holding as part of the transaction.
The proposed merger comes at a time when the global IT services industry is undergoing rapid change. The growing adoption of generative AI and automation is pushing technology companies to invest heavily in specialised skills and new service models.
At the same time, clients are increasingly looking for technology partners capable of handling multiple aspects of digital transformation. Scale has therefore become an important factor in the IT services industry.
A larger workforce, wider geographical reach and broader technology capabilities could help the combined company compete for bigger global contracts while allowing it to invest more aggressively in emerging technologies.
The transaction also has strategic significance for ITC. The conglomerate has been expanding its technology presence through ITC Infotech, and the Happiest Minds deal would substantially increase the scale of that business.
Market reaction to the announcement was mixed. Happiest Minds shares came under pressure following the merger announcement, while ITC shares gained during trading. Investors are likely to assess the valuation, share-swap structure and potential benefits of the proposed combination before determining its long-term impact.
For Happiest Minds shareholders, the eventual value of the transaction will depend on the performance of the merged company and the market performance of the new ITC Infotech shares after listing. For ITC shareholders, the key question will be whether the acquisition can deliver stronger growth and improve the group’s position in the technology sector.
The transaction is expected to take several months to complete because of the regulatory and shareholder approval process. Until the merger becomes effective, the two companies will continue to operate separately.
If completed, the combination will create a significantly larger technology services business, with more than 19,000 employees, a global customer base and capabilities spanning AI, digital engineering, cloud, cybersecurity and enterprise technology.
The ambitious $1 billion revenue target by FY28 underlines the broader objective behind the deal — creating a technology company with the scale, expertise and global reach to compete more aggressively in the rapidly changing IT services market.