Tech Mahindra shares edge higher after THIS merger update. Do you own?

Tech Mahindra share price gained over a percent on Tuesday after the company announced a plan of merger between its two US-based subsidiaries. Tech Mahindra shares rose as much as 1.67% to ₹1,692.70 apiece on the BSE.

The IT major Tech Mahindra said that a plan of merger of Tech Mahindra Cerium Systems Inc., its wholly-owned subsidiary, with Tech Mahindra (Americas) Inc., its wholly-owned material subsidiary, has been approved by the Board of Directors of the respective companies on February 17, 2025.

The merger is subject to regulatory approvals in the country of incorporation. The appointed date of merger is February 20, 2025, Tech Mahindra said in a regulatory filing.

“The consolidation of these entities will result in reducing the number of entities in the group, optimization of operational cost and reduction in the compliance risk,” Tech Mahindra said, explaining the rationale for the amalgamation.

Tech Mahindra Cerium Systems Inc.

Tech Mahindra Cerium Systems Inc. (TMCS), the transferor company was incorporated in the USA in the year 2014. TMCS is engaged in providing design services in semi-conductor industry and embedded software services. It is currently a non-operating entity.

The turnover of TMCS for the financial year ended 31st March, 2024 is $2.7 million, Tech Mahindra said.

Tech Mahindra (Americas) Inc.

Tech Mahindra (Americas) Inc. (TMA), the transferee company, was incorporated in the USA in 1993, and is a wholly-owned material subsidiary of Tech Mahindra. The turnover of TMA for FY24 was $1,153.28 million.

TMA provides computer consulting, programming support services and IT Management & Consulting Services to customers in various industries including Healthcare.

Tech Mahindra Stock Price Trend

Tech Mahindra share price has gained only over 1% in the past three months and the IT stock has risen by 6% in six months. Over the past one year, Tech Mahindra shares rallied 29%, and the stock has delivered 49% returns in two years.

On the technical side, Anshul Jain, Head of Research at Lakshmishree Investment and Securities, believes that Tech Mahindra shares are in a consolidation phase, signaling a potential breakout.

“Tech Mahindra stock is currently consolidating within a broader range of ₹1,600 - ₹1,750, with volumes drying up — often a sign of positive accumulation. This phase suggests that while short-term trading opportunities remain limited, long-term investors should focus on accumulating near the range’s lower end. A breakout above ₹1,750 could trigger a strong upward move, making it a stock to watch,” Jain said.

With improving fundamentals and technical strength, Tech Mahindra shares present a compelling opportunity for value investors, he added.

At 11:15 AM, Tech Mahindra shares were trading 0.92% higher at ₹1,680.25 apiece on the BSE.

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