Larsen & Toubro Infotech Limited (“LTl” or the Transferee Company”) was incorporated on December 23, 1996 under the provisions of the Companies Act, 1956, and is a public limited company within the meaning of the Act, have corporate identification number L72900MH1996PLC104693. Its registered office is at L&T House, Ballard Estate Mumbai – 40 0001 and corporate office is located at Technology Tower 1, Gate No. 5, Saki Vihar Road, Powai Mumbai – 400072. LTl is primarily engaged in in the information technology services. The equity shares of LTl are listed on the Stock Exchanges.
Mindtree Limited (“Mindtree” or “the Transferor Company”) was incorporated on August 5, 1999 under the provisions of the Companies Act, 1956, and is a public limited company within the meaning of the Act, having corporate identification number L72200KA1999PLC025564. Its registered and corporate office is at Global Village, RYCE Post, Mysore Road, Bengaluru – 560059. Mindtree is also primarily engaged in information technology services business. The equity shares of Mindtree are also listed on the Stock Exchanges.
Current structure of the group is as under:
Management of the Transferor Company and the Transferee Company has decided to amalgamate the Transferor Company with and into the Transferee Company and consequent dissolution of the Transferor Company without winding up and consequent issue of fully paid up equity shares by the Transferee Company to the shareholders of the Transferor Company.
Restructuring of the group can be depicted as under:
Key features of the above transactions:
Key features | Transaction: Merger of the Transferor Company with and into the Transferee Company |
Appointed Date | April 1, 2022 |
Effective Date | Date of filling of certified copy of approving authority being NCLT with ROC. |
Jurisdictional Authority(ies) | Securities and Exchange Board of India Limited; BSE Ltd; The National Stock Exchange of India Limited; Jurisdictional National Company Law Tribunal (‘NCLT’); Jurisdictional Registrar of Companies (‘ROC’); Jurisdictional Regional Director (‘RD’) NCLT appointed Official Liquidator |
Consideration | The Transferee Company shall issue shares to the shareholders of the Transferor Company to the extent of holding by the Transferor Company in the Transferee Company, in proportion to their holding in the Transferor Company. |
Accounting Treatment | Pooling of interest method; |
Taxation | Tax neutral transaction |
Pre and Post shareholding patterns of the group companies, pursuant to effectiveness of the Scheme:
Name of the Company | Pre-Scheme Shareholding | Post-Scheme Shareholding | ||
% Promoter Shareholding | % Public Shareholding | % Promoter Shareholding | % Public Shareholding | |
Larsen & Toubro Infotech Limited | 74.048% | 25.952% | 68.73% | 31.27% |
Mindtree Limited | 60.99% (held by LTI) | 39.01% | NA, since merged | NA, since merged |
Resultant structure post approval of the Scheme is as under:
Purpose of group restructuring:
The Amalgamation would be in the best interest of the Companies and their respective shareholders, employees, creditors and other stakeholders as the Amalgamation is expected to:
- Result in an Amalgamated Company that is expected to have improved financial strength. Particularly, the Companies believe the combined business will augment industry- leading revenue growth and profitability. Further, the Companies expect that their combined balance sheet will provide diverse strategic options and flexibility arising from cost efficiencies and synergies such as optimization of sales, general and administration (SG&A) costs, consolidation of delivery operations (domestic and overseas) and of overseas entities/ branches.
- Enable the combined business to derive benefits by way of creating more opportunity for growth in customer relationships/ value creation through enhanced attention to brand building, including the corporate brand, develop strong relationships across its partner ecosystem, using the augmented intellectual capital and stronger implementation capabilities resulting from the Amalgamation.
- Enable the combined business to cross-sell and up-sell opportunities as part of one combined business, achieve a higher number of active clients, cater to a wider customer base and diversify their combined revenue profile with reduced concentration risks.
- Help the combined business exploit the complementary capabilities of both the Companies. Particularly, it gives the combined business the opportunity to consolidate its position in the banking, financial services and insurance (BFS[) vertical, enhance scale in high growth verticals like high-tech and consumer packaged goods , retail and expand into new verticals (such as travel, transport and hospitality).
- significantly enhance scale for the combined business and bridge the gap between the Companies and their peers. With this enhanced scale, the Amalgamated Company should be able to bid for larger deals and also drive a cohesive “go to market” strategy across the globe.
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