Bengaluru: Shares of Happiest Minds Technologies rose nearly 6% on the BSE on Monday after reports indicated that ITC Infotech has emerged as the frontrunner to acquire a significant promoter stake in the Bengaluru-based mid-tier IT services company. This is what could be one of the largest consolidation deals in India’s IT services sector this year.Sources told TOI that LTIMindtree is also evaluating the opportunity and remains in the fray. However, discussions have slowed as prospective bidders drive a hard bargain on valuation. The stake sale process is understood to be at an advanced stage, raising the likelihood of a block deal in the coming weeks. A partial exit by Soota is also expected to spark discussions about the company’s leadership succession.The proposed transaction involves founder Ashok Soota diluting his promoter holding. Soota had appointed an investment banker several months ago to explore a stake sale and oversee the due diligence process.Soota directly owns more than 32% of Happiest Minds and controls over 40% through various promoter entities. In addition, Ashok Soota Medical Research holds an 11.8% stake in the company. At the current market price, Soota’s direct holding is valued at around Rs 2,700 crore. However, sources told TOI that the deal lost momentum because the initial asking price was upwards of Rs 3,000 crore, even as IT services companies’ valuations have come under pressure amid concerns over AI-led disruption.In a clarification to the stock exchanges, Happiest Minds said, “We have taken note of the captioned news item and confirm that there is no information which requires disclosure under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. As a general matter, the Company, as part of its business strategy, keeps exploring various strategic opportunities that are intended to be in the best interest of its stakeholders.”When contacted by TOI, an ITC Infotech spokesperson said the firm does not comment on market speculation. An LTIMindtree spokesperson said, “As a company policy, we do not respond to rumours or speculation.”If successful, the acquisition would significantly strengthen ITC Infotech’s scale in digital engineering, cloud, AI and enterprise technology services. For FY26, the company reported revenue of Rs 3,488 crore, up from Rs 3,204.3 crore a year earlier, while net profit increased to Rs 497 crore from Rs 466 crore.In recent years, ITC Infotech has expanded its international footprint by setting up subsidiaries in Brazil, Mexico, France, Germany, Italy, Malaysia and Saudi Arabia. It also acquired cloud services firm Blazeclan Technologies, giving it operations across Singapore, Australia, Malaysia, Belgium, New Zealand, the US, Canada and the Philippines.The company has also deepened its capabilities in product lifecycle management (PLM). It established its first offshore development centre with Nasdaq-listed PTC in Bengaluru in 2003 and later acquired a substantial part of PTC’s PLM consulting and professional services business, including around 160 consultants. The acquisition formed the basis of its DxP Services business unit, focused on helping customers accelerate digital transformation and the adoption of PTC’s PLM software-as-a-service offerings.
