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Listen to this article in summarized format Additionally, ITCI initially plans to buy a 22.1% stake from HMT promoters for ₹1,330 crore in cash. The acquired stake is short of the minimum 25% required to trigger an open offer. It means while promoters receive the cash from the stake sale, there will be no cash exit for minority shareholders as the latter will receive proportionate shares in ITCI. While the combined entity is expected to achieve better profits and profitability in the long run due to business synergies, HMT's stock is expected to be under pressure in the near term. According to a research note by HDFC Securities, the share swap values HMT at ₹6,167 crore and ITCI at ₹11,920 crore, implying FY26 enterprise value (EV)/operating profit before depreciation and amortisation (EBITDA) multiples of 15.1 and 13.6 respectively. After the merger, ITC will own 73.4% of the combined entity. The implied market cap of the merged entity will be ₹18,060 crore. Read more: Berkshire Hathaway CEO Greg Abel sees AI, power demand as new engines of growth Based on FY26 financials, the combined entity will have a revenue of ₹7,033 crore ($790.5 million), making it the country's 11th largest listed software company. ITCI operated at a higher EBITDA margin of 18.5% compared with HMT's 17.4% in FY26. The merged entity will have a margin of 18.1% and a net profit of ₹737 crore. The deal will offer the required size for the combined entity to bid for larger deals. ITCI focuses on verticals including consumer, hospitality and manufacturing while HMT caters to banking and finance, EdTech, and healthcare, which suggests lower overlapping in services. The merged entity expects to cross $1 billion in revenue by FY28 at 19.1% EBITDA margin. HDFC Securities has downgraded HMT's stock to 'Add' from 'Buy' and reduced the target price to ₹400 from ₹440 citing lack of takeover premium and uncertainty due to longer expected duration of 15 months for the integration of two businesses. The stock closed at ₹354.5 on the BSE on Wednesday. (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
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