Persistent Systems Gets NCLT Approval for Arrka Infosec Merger

Persistent Systems has received final approval from the National Company Law Tribunal (NCLT) for its merger with subsidiary Arrka Infosec Private Limited. The NCLT's order was pronounced on April 21, 2026, with an appointed date for the merger set at April 1, 2025. This move aims to simplify the company's structure and improve operational efficiency.

NCLT Sanctions Merger

The National Company Law Tribunal (NCLT) has officially approved the merger of Arrka Infosec Private Limited into Persistent Systems Limited. The NCLT's order was pronounced on April 21, 2026.

The merger's appointed date is April 1, 2025, meaning financial and operational integration has been underway since then. Persistent Systems informed the stock exchanges about this development on May 11, 2026.

Following the merger, Arrka Infosec will cease to exist as a separate legal entity, with its operations and employees absorbed by Persistent Systems. The primary objective is to streamline the corporate structure and reduce operational duplication.

Streamlining Operations

This merger advances Persistent Systems' goal of operational efficiency and a simpler corporate structure. By combining the subsidiary, the company expects to gain better coordination and reduce administrative costs. This integration aims to allow a more focused approach to its digital engineering and IT services.

Strategic Growth Context

Persistent Systems pursues strategic growth, including acquisitions to enhance its offerings. In recent years, the company acquired Data Glove (2021) and ProductOne (2023) to strengthen its capabilities in data analytics and product lifecycle management. The merger with Arrka Infosec fits this strategy by simplifying its structure and boosting its digital engineering services.

Key Changes Post-Merger

• Arrka Infosec Private Limited will no longer exist as a separate company.
• All Arrka Infosec employees will move to Persistent Systems with similar or better employment terms.
• The corporate structure will become simpler, cutting down complexity and overlap.
• Combined operations may lead to better efficiency and cost savings.

Risks to Watch

The Income Tax Department has reserved the right to examine tax implications arising from the merger scheme. Any findings of tax avoidance could lead to further action. Furthermore, liabilities stemming from Arrka Infosec's past offences can still be pursued against the resultant entity, Persistent Systems.

Peer Comparison

Persistent Systems operates in the competitive IT services and digital engineering sector. Key peers include:

• L&T Technology Services (LTTS): Specializes in engineering R&D services.
• Cyient: Offers integrated engineering, manufacturing, and digital solutions.

These peers also engage in strategic integrations and acquisitions to expand their service portfolios and market reach.

Key Dates

• The merger's appointed date: April 1, 2025.
• NCLT order pronounced: April 21, 2026.

What to Watch For

• Filing of the NCLT order and the Scheme of Arrangement with the Registrar of Companies (ROC) within 30 days.
• Any actions or reviews by the Income Tax Department regarding the merger's tax implications.
• Management updates on the benefits achieved from the integration.