L&T set to control Mindtree, increases stake to 51%, says report

In March, Mindtree ditched a plan to buy back shares in a bid to counter L&T's hostile takeover approach

Larsen and Toubro Ltd (L&T) has acquired a controlling stake in IT services company Mindtree Ltd, CNBC TV18 reported citing sources.

The report comes within months of Mindtree rejecting a hostile takeover bid from L&T, saying that the plan was of no value for the firm or its shareholders.

L&T's hostile bid to acquire a controlling stake in Mindtree is the first in India's software services industry and is rare in India's corporate sector, where unsolicited suitors are usually deterred by founders with large shareholding.

The Mumbai-based construction giant increased its stake in Mindtree to 51 per cent, the channel reported, adding L&T got over 21 per cent stake through open offer so far.

In March, L&T bought a fifth of Mindtree from coffee baron V G Siddhartha and companies related to him for Rs 32.69 billion ($474.73 million) and said it planned to raise its stake to 66 per cent.

As of March 19, Mindtree founders, including Executive Chairman Krishnakumar Natarajan and Chief Executive Rostow Ravanan owned a combined 13.3 per cent stake in the company.

Since March, L&T kept buying stake in Mindtree from its promoters and through an ongoing open offer. Mint reported  Singapore-based Nalanda Capital on Monday sold its entire 10.61 per cent stake in the IT services firm to L&T in the offer.

Mindtree was not immediately available to comment, while L&T declined to comment on the matter.