ITC shares zoom 4.5%, Happiest Minds tumbles 9% after merger announcement; key details

Shares of diversified conglomerate ITC Ltd were trading with impressive gains in the early trade on Tuesday, September 1, after the announcement that ITC Infotech, its wholly owned subsidiary, will merge with Bengaluru-based Happiest Minds Technologies to create an AI-first enterprise with a $1 billion turnover by FY28.

As a precursor to the merger, ITC Infotech will acquire a 22.106% stake from Happiest Minds promoter Ashok Soota and Ashok Soota Medical Research LLP, according to regulatory filings.

Following the stake purchase, Happiest Minds will be amalgamated with and into ITC Infotech.

The combined entity, with a global workforce of over 19,000 professionals, will bring complementary capabilities to deliver a full-stack value proposition for end-to-end solutions spanning build, intelligence, and operations whilst expanding into high-potential verticals including hi-tech, healthcare, and edtech.

Stocks' performance

Shares of ITC rallied as much as 4.69% to ₹267.50 apiece on the NSE in the early trade. At 09:34 AM, the stock was trading at ₹264.40, up 3.48%. Happiest Minds Technologies, on the other hand, tumbled up to 8.8% to ₹371.10 on the NSE.

Merger details

The stake purchase will be executed in two tranches. The first tranche involves the acquisition of an 11% stake at ₹390 per share, followed by an 11.106% stake at ₹400 per share, according to regulatory filings.

Upon the merger becoming effective, ITC Infotech is proposed to be listed on the BSE and the National Stock Exchange (NSE).

According to the approved share swap ratio, ITC Infotech will allot 25 fully paid-up equity shares of ₹10 each for every 81 shares of ₹2 each held by Happiest Minds' shareholders.

The transaction will result in ITC Limited becoming the promoter of the combined entity with a 73.4% stake. Post-merger, the current promoters of Happiest Minds will be reclassified as public shareholders with a 7.6% holding in the combined entity.

What Sanjiv Puri, Chairman of ITC, said

Sanjiv Puri, Chairman of 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," Puri said.

According to the filings, the combined entity will become India's 11th largest listed IT services player by revenue, with a combined FY26 revenue of ₹7,033 crore, with a presence in the USA, Europe, the Middle East, APAC, and India.

Happiest Minds Q1 FY27 earnings

IT company Happiest Minds Technologies reported an 18.3% year-on-year (YoY) growth in consolidated net profit to $67.6 crore in the April-June quarter of FY27 (Q1 FY27).

The company had posted a net profit of $57.13 crore in the corresponding quarter of FY26, according to a regulatory filing.

Revenue from operations grew 14.3% to ₹628.51 crore during the quarter under review, as compared to ₹549.9 crore in the year-ago period.

Seen sequentially, profit and revenue rose 10.5% and 4%, respectively.

"We have opened FY27 with a solid performance. Our AI-first strategy is gaining significant traction, with strong momentum across AI and analytics, digital engineering, platforms, and industry-focused solutions. We have also built a strong and expanding pipeline, registering a 20 per cent growth over the previous quarter," Happiest Minds CEO Joseph Anantharaju said.

Anantharaju said the quality and breadth of opportunities in the firm's pipeline instils in him confidence to deliver sustained business growth.

As of June 30, 2026, the company has 6,532 employees across 16 countries.

Other key numbers

Happiest Minds reported a consolidated turnover of ₹2,315.11 crore for FY26, while ITC Infotech's revenue stood at ₹4,718 crore.

Furthermore, the board of Happiest Minds has approved the proposed shifting of its registered office from Karnataka to West Bengal, subject to shareholder and regulatory approvals.

The M&A deal counter buzzed earlier this year when Persistent Systems announced it will take over German digital engineering company Nagarro, a move aimed at creating a global AI-led digital engineering powerhouse with $2.9 billion in revenue run-rate, with 46,000-plus employees in more than 40 countries, including about 37,000 in India.

About ITC Infotech

ITC Infotech is the IT services and digital solutions arm of the ITC Group, providing technology services to enterprises across sectors. Its operations span digital engineering, cloud, data and AI, cybersecurity, enterprise applications and infrastructure, with a focus on industry-specific solutions.

The company serves clients across sectors including banking and financial services, manufacturing, consumer goods, healthcare, travel and hospitality, and media and entertainment.