ITC’s big bet!
There is a big stir going on in the IT sector these days. ‘ITC Infotech’, a subsidiary of the giant ITC, has come forward in the race to buy the mid-sized IT company ‘Happiest Minds’. Currently, talks are going on between the two companies regarding the size, valuation and structure of this deal, which can be finalized soon. If this deal is completed, it will have a huge impact, from stock market investors to the IT sector.
Who is selling the stake?
At the center of this entire deal is Ashok Soota, founder and executive chairman of Happiest Minds. 83 year old Ashok Soota, a well-known name in the IT industry, has now decided to sell his stake in his company. He directly holds more than 32 percent stake in the company. At the same time, if other promoter holdings are also included, this figure goes beyond 40 percent.
Out of this, about 11.8 percent share is in the name of ‘Ashok Suta Medical Research LLP’. The share price of Happiest Minds in the stock market is currently hovering around Rs 403. According to this price, the value of Soota’s total stake comes to around Rs 2,600 crore. According to the rules, in any agreement the promoter stake of Soota will be purchased first. After this, an open offer will also be made for common shareholders under the takeover rules of SEBI.
Why is this deal a gamechanger for ITC?
Now the question arises that why does ITC want to buy this company? In fact, if this deal is completed, it will prove to be a huge step for ITC Infotech. The company wants to rapidly expand its digital engineering and artificial intelligence (AI) business.
With the arrival of Happiest Minds, ITC will get tremendous benefits in fast growing sectors like cloud, data, cyber security and digital transformation. Also, the number of their customers will also increase across the world. As part of its expansion policy, ITC Infotech had also acquired cloud service company Blazeclan Technologies for Rs 485 crore in October 2024.
Why is there a race for acquisition in the IT sector?
In 2011, Ashok Soota started Happiest Minds in Bengaluru. In the last decade, this company has created a distinct and strong identity for itself in the field of digital transformation. But now the entire environment of IT industry is changing. Uncertainty in the global economy, increased interest rates after the pandemic and decreasing IT budget of companies have created many challenges for this sector. On top of that, after the arrival of Generative AI (GenAI) in November 2022, there is a different atmosphere of concern regarding software jobs.
For all these reasons, IT companies are now joining hands with each other, so that they can increase their strength and expand their scope in AI and digital engineering. This deal is not an isolated one; Last month itself, India’s eighth largest IT company Persistent Systems has purchased German company Nagarro for approximately $1.3 billion. At the same time, Coforge has also acquired American company Encora by paying a huge amount of $2.35 billion.
