Rating of Mindtree’s Acquisition of Nxt Digital Business by Ind-Ra is Neutral

Asian News International

Mumbai (Maharashtra) [India], May 22 (ANI): India Ratings and Research (Ind-Ra) has stated that Mindtree’s acquisition of Nxt Digital business of Larsen & Toubro is credit neutral for the company. The agency believes that Mindtree’s steady positive free cash flow production over the past four years and its strong cash and equivalents (end-FY21: Rs 2,690 crore) can easily cover the cash payment of Rs 198 crore for the acquisition.

Ind-Ra has stated that Mindtree’s overall financial credit profile will remain strong, even after the transaction is completed by July 31. In addition, Mindtree plans to use NxT Digital’s business expertise in different industries to achieve strong operational efficiencies, digitize the manufacturing and engineering value chain, and provide customers with a unique experience.

The company intends to improve its cloud-based Internet of Things capabilities and gain opportunities in the Industry 4.0 space with the acquisition and offer a complete end-to-end digital transformation solution to its customers. Ind-Ra has taken into consideration Mindtree’s expected financial and operational support from L&T. The agency upgraded Mindtree’s rating to AAA from AA-plus in March, based on the agency’s expectation of an improvement in its business and financial profile. (ANI)

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