Tech Mahindra’s board of directors has given the green light for the merger of three of its subsidiaries and their shareholders. This announcement coincided with the release of the company’s September quarter results.
“The Board of Directors of the Company at its Meeting held on October 25, 2023, subject to requisite approved, the Scheme of Merger by Absorption of Perigord Premedia (India) Private Limited and Perigord Data Solutions (India) Private Limited and Tech Mahindra Cerium Private Limited, wholly owned subsidiaries of the Company, with the Company and their respective shareholders (“Scheme”) under section 230 to 232 and other applicable provisions of the Companies Act, 2013,” it said in an exchange filing.
The merger is set to take effect on April 1, 2024, or as directed by the National Company Law Tribunal (NCLT) or another relevant authority. Tech Mahindra will take on the assets and liabilities of these three subsidiaries at their current values. Any inter-company agreements with these subsidiaries will be terminated, and the company’s books will be adjusted accordingly.
Tech Mahindra currently holds all the shares of these three subsidiaries. Once the merger is complete, Tech Mahindra will not issue any new shares in exchange for these holdings, effectively cancelling the equity shares of the subsidiaries.
In its financial report for the second quarter of the fiscal year 2024, Tech Mahindra’s consolidated net profit saw a significant 61.1% year-on-year decrease, dropping to ₹505.3 crore from ₹1,299.2 crore. However, its revenue from operations increased by 3.5% to ₹13,159 crore, up from ₹12,707 crore in the previous year.
On the operational side, the company’s EBITDA for the June quarter fell by 28.8% year-on-year to ₹1,338 crore, compared to ₹1,880 crore in the same quarter the previous year.
Tech Mahindra also declared an interim dividend of ₹12 per equity share with a face value of ₹5 each.
The company’s stock price on the BSE declined by 1.16% to ₹1,141.70 on Wednesday.