Tech Mahindra , a leading Indian IT services and consulting company, has announced the incorporation of a wholly-owned subsidiary in Saudi Arabia, marking a significant step in its Middle East expansion strategy.

New Subsidiary Details

The new entity, named "Tech Mahindra Regional Headquarters Company" (TechM RHQ), was incorporated on August 14, 2025, in the Kingdom of Saudi Arabia. The company made this announcement in a regulatory filing to the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE) on August 20, 2025.

Strategic Objectives

TechM RHQ has been established with the primary objective of supporting, managing, and providing strategic direction to Tech Mahindra's subsidiaries operating in Bahrain and Egypt. This move is expected to strengthen the company's presence and operational capabilities in the Middle East region.

Financial Aspects

The newly incorporated subsidiary has an authorized share capital of 100,000 Saudi Arabian Riyals (SAR). Tech Mahindra has subscribed to 100 shares at a face value of SAR 1,000 per share, aggregating to SAR 100,000, representing a 100% ownership stake in TechM RHQ.

Industry and Regulatory Compliance

The new subsidiary will operate in the IT & ITES (Information Technology Enabled Services) sector, aligning with Tech Mahindra's core business. The company has stated that no specific governmental or regulatory approvals were required for this incorporation.

Impact on Related Party Transactions

Tech Mahindra clarified that the initial subscription to TechM RHQ's share capital does not fall within the purview of Related Party Transactions for the company. However, following the incorporation, TechM RHQ has become a wholly-owned subsidiary and, consequently, a Related Party of Tech Mahindra.

Market Implications

This strategic move by Tech Mahindra underscores the company's commitment to expanding its global footprint, particularly in the Middle East. By establishing a regional headquarters in Saudi Arabia, Tech Mahindra is positioning itself to capitalize on the growing IT services market in the region and to provide more localized support to its operations in Bahrain and Egypt.

The incorporation of this new subsidiary reflects Tech Mahindra's proactive approach to strengthening its international presence and its focus on enhancing its capabilities to serve clients in the Middle East more effectively.

Tech Mahindra 's step-down subsidiary, Pininfarina S.p.A., has significantly boosted its stake in Italian stationery business Signature S.r.l, marking a strategic move to strengthen its presence in the consumer channel and enhance the Pininfarina brand.

Acquisition Details

On August 14, 2025, Pininfarina completed the acquisition of an additional 60% stake in Signature S.r.l, increasing its shareholding from 24% to 84%. The transaction, valued at EUR 134,375.00, was executed through cash consideration and comprised two components:

• EUR 1,875.00 for the subscription of additional shares in Signature
• EUR 132,500.00 for the acquisition of additional shares from existing shareholders

About Signature S.r.l

Signature S.r.l, incorporated on December 20, 2017, is an Italy-based company primarily operating in the stationery business. The company has shown steady growth over the past few years, with its turnover reaching EUR 2.90 million as of December 31, 2024. Signature's financial performance over the last three years demonstrates a positive trend:

Strategic Implications

This acquisition transforms Signature into a subsidiary of Pininfarina and a step-down subsidiary of Tech Mahindra. The move is aimed at:

1. Strengthening Pininfarina's presence in the consumer channel
2. Further enhancing the Pininfarina brand
3. Expanding Tech Mahindra's indirect presence in the retail and consumer sector

Transaction Classification

The acquisition has been classified as a related party transaction, conducted on an arm's length basis. It's worth noting that while Pininfarina is an associate company of Tech Mahindra's promoter, the promoter company does not hold any direct interest in this transaction beyond their shareholding in Pininfarina.

Regulatory Compliance

Tech Mahindra has duly informed the BSE Limited and the National Stock Exchange of India Ltd about this acquisition, in compliance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

This strategic move by Tech Mahindra, through Pininfarina, underscores the company's commitment to expanding its footprint in the consumer sector and leveraging brand synergies. As the integration process unfolds, it will be interesting to observe how this acquisition contributes to Tech Mahindra's overall growth strategy in the coming years.