Zensar Technologies is in active talks to acquire an 18-20% stake from promoters of mid-sized peer Mastek, according to Mint reports citing three people familiar with the matter. The proposed transaction is expected to be valued at over $200 million and could go up to $400 million, though discussions are ongoing and no deal has been finalized. Consulting firm EY is advising Zensar on the deal, with the promoter stake sale contingent on both sides agreeing on the company's enterprise valuation. As per Mint, the promoters have been wanting to sell for a while now, but as per their current expectations, the deal could value the company at almost double its current market capitalisation.
Zensar Technologies Limited has issued a formal clarification denying reports of acquisition talks with Mastek following recent media speculation. The company stated that as of the current date, there is no information or development that necessitates disclosure under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Zensar confirmed they are not aware of any unannounced information that could explain any potential trading movements, and affirmed their commitment to making appropriate announcements to stock exchanges in compliance with applicable laws should any disclosure become necessary. The company also clarified that the aforementioned article has no material impact on Zensar Technologies as of the date of this communication.
The clarification comes after Zensar Technologies was reportedly close to acquiring Mastek in an $850-900 million stock-and-cash deal, according to The Times of India. The negotiations between the Pune-based Zensar and Mumbai-based Mastek were nearing completion, with sources indicating the deal was in its final stages. If completed, the combined entity would have revenues exceeding $1.3 billion, creating a stronger mid-market challenger with an expanded AI and digital engineering portfolio. The proposed sale comes at a time when Mastek has been losing share to larger peers, recently missing out on a $1.6 billion IT modernisation contract from the UK's National Health Service, which was awarded to Infosys.
Mastek currently has a market capitalization of ₹6,429 crore with promoters and promoter group entities owning 35.77% of the company, according to BSE data. Founder Ashank Desai is the company's single-largest individual shareholder, holding about 10.95% of the shares, while chief executive Umang Nahata owns around 5.48%. If the stake sale goes through, it could lay the groundwork for a potential merger, which would create a new entrant in Indian IT's $1 billion revenue club. Zensar reported revenue of approximately ₹5,300 crore in FY25 and employs over 10,000 people, while Mastek generated ₹3,455 crore in FY25 with 57.3% of revenue from the UK.
The deal comes seven years after L&T's unsolicited bid to acquire 66% in Mindtree for up to ₹10,700 crore, highlighting renewed consolidation among technology services firms. According to Mint, potential buyers such as private equity firm ChrysCapital and Pune-based IT services firm Persistent Systems Ltd had evaluated the deal earlier, with Persistent even reaching the exclusivity stage before deals fell through due to high valuation expectations. The move bolsters the ongoing trend of consolidation in the IT/ITeS services sector, driven partly by dramatic changes ushered in by AI and global customers looking to reduce their number of vendors. Zensar has been dealing with its own challenges, including lower business from Cisco Systems, one of its top five clients, as the US technology major reduces vendor numbers.
Industry experts view the potential combination favorably, with Everest Group's Peter Bendor-Samuel noting that Zensar is looking to participate in industry consolidation and add scale quickly. HFS Research's Phil Fersht emphasized that Mastek's UK presence, combined with Zensar's digital and engineering capabilities, could create a more complete proposition for European enterprises. Bank of Baroda Capital Markets analysts noted that Zensar's path to the $1 billion revenue milestone has been under scrutiny after reporting full-year revenue declines in two of the last five years. Access to the UK market is expected to support growth amid uncertain demand, with each of TCS's last five mega deals coming from the UK region.
