Why Tech Mahindra Shares Are In Focus On Tuesday

Tech Mahindra, one of India’s top IT services and consultancy firms, saw its shares remain range-bound on Tuesday after announcing a merger between its wholly-owned subsidiary, Born Group, and its parent company, Tech Mahindra (Americas) Inc.

What Happened: The consolidation agreed upon on March 22, 2024, aims to enhance operational efficiency, reduce costs, and minimise compliance risks. The merger is scheduled to take effect on April 1, 2024, pending regulatory approval.

Born Group specializes in brand strategy, visual design, and brand identity for digital and physical products in the US. It complements the services offered by Tech Mahindra (Americas), which include computer consulting, programming support, and IT management and consulting.

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Tech Mahindra expects this strategic move to streamline operations and achieve cost efficiencies without needing cash transactions or issuing new shares. Tech Mahindra (Americas) will cancel its investment in Born once it completes the merger.

The shareholding pattern of Tech Mahindra will remain unchanged post-merger. Financially, Born and Tech Mahindra (Americas) reported turnovers of $55.08 million (₹459 crore) and $1.2 billion (₹9,999 crore), respectively, for the fiscal year ending March 31, 2023.

Price Action: Tech Mahindra Ltd. shares were trading 0.69% lower at ₹1,256.45 on Tuesday, shortly after markets opened for trading.

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