Larsen and Toubro receives promoter's tag in Mindtree with 60% stake

Mindtree on Wednesday informed stock exchanges that engineering major Larsen and Toubro (L&T) was categorised as ‘promoter’ of the Bengaluru-based IT services firm after its acquisition of 60 per cent stake in the company.

“L&T has acquired equity shares to an extent 60.06 per cent of the total shareholding of the company and has acquired control and is categorised as ‘promoter’ pursuant to Sebi (issue of Capital and Disclosure Requirements) Regulations, 2018,” the company said in an exchange filing.

As on July 2, L&T was holding a total of 98.7 million shares of the company, the fling showed. While L&T acquired 20.32 per cent stake from Coffee Day founder V G Siddhartha for ~3,269 crore in March, it subsequently bought around 9 per cent stake from the open market. Though the open offer, which completed last week, L&T bought another 31 per cent stake in Mindtree, taking its aggregate holding to 60.06 per cent. 

In the open offer process, though most foreign portfolio investors (FPIs), including Nalanda and Arohi Asset Management, sold their shares, sources said the founders had not yet tendered any shares. Currently, the founders, including Subroto Bagchi, N S Parthasarathy, Krishnakumar Natarajan and Rostow Ravanan together hold 13 per cent in the company.

Last week, Mindtree board has approved appointment of three L&T’s nominees, which included the Mumbai-based firm’s Chief Executive Officer and Managing Director S N Subrahmanyan and its Chief Financial Officer Ramamurthi Shankar Raman. In that rejig, Mindtree’s co-founder Subroto Bagchi has opted out of reappointment. “Without the promoter’s tag, an acquirer can’t appoint directors in executive roles on the board. However, with L&T receiving the promoter’s tag, a change in the current executive roles seems imminent,” sources said.

Mindtree is scheduled to hold its next annual general meeting (AGM) on July 16 in which the broader contour of L&T’s plan for the Bengaluru-headquartered IT firm is likely to be known, they added.