Tech Mahindra sells stake in Altiostar to Rakuten

The IT services provider's wholly-owned subsidiary Tech Mahindra (Americas) has sold its stake in Altiostar Networks for $45 million to Rakuten's US subsidiary.

Tech Mahindra (Americas) Inc. divested its holding of 18,518,518 C1 preferred shares in Delaware-based Altiostar Networks to the buyer. As it is a minority investment there is no contribution to turnover/revenue/income and net worth by Altiostar Networks, Inc. during the last Financial Year, Tech Mahindra said in a filing.

Further, Tech Mahindra and Rakuten Mobile Inc have reached an agreement in which Tech Mahindra has been appointed as a preferred partner for global go-to-market opportunities for the Rakuten Communications Platform (RCP).

As a preferred partner, Tech Mahindra will provide its leading technologies and software capabilities to support the development and deployment of mobile networks for global customers of RCP. Tech Mahindra will also provide managed IT, security and network services to Rakuten Mobile, and there are also plans to designate Tech Mahindra as an official reseller of RCP.

Rakuten Mobile, Inc. is a Rakuten Group company responsible for mobile communications, including mobile network operator (MNO) and mobile virtual network operator (MVNO) businesses, as well as ICT and energy.

Tech Mahindra's consolidated net profit jumped 20.9% to Rs 972 crore on 4% fall in revenue to Rs 9,106 crore in Q1 June 2020 over Q4 March 2020.

Tech Mahindra is engaged in the business of computer programming, consultancy and related services. The firm's segments include information technology (IT) services and business processing outsourcing (BPO).

Shares of Tech Mahindra slipped 1.69% to Rs 787 on BSE. The scrip has galloped 67.35% from its 52-week low of Rs 470.25 hit on 23 March 2020.

In the past one month, shares of Tech Mahindra advanced 8.89%, underperforming the Nifty IT index's 10.05% jump in the same period.

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