TCS shares end flat after Mitsubishi deal

Written by PTI | Mumbai | Updated: Apr 22 2014, 00:50am hrs
Shares of TCS today ended flat after the company signed an agreement to merge two units in Japan with an arm of Mitsubishi Corporation to form an IT company with expected sales of USD 600 million.

At the end of trade, shares of TCS were up 0.14 per cent to Rs 2,220.50 on the BSE. During the day, the stock gained 1.1 per cent to Rs 2,242.

On the NSE, the stock, however, settled 0.13 per cent lower at Rs 2,219.95.

Under the agreement, India's largest software services firm will merge TCS Japan and Nippon TCS Solution Center with IT Frontier Corporation (ITF), the fully owned arm of Mitsubishi. The new company is yet to be named.

TCS will hold a 51 per cent stake and Mitsubishi 49 per cent in the merged entity, which is expected to have an annual turnover of over USD 600 million from the next financial year.

The new entity is expected to be operational from July if approvals are in place and is expected to report revenue of USD 300 over the remaining nine months of the financial year.