MindTree ends higher after see-saw trade

MindTree rose 0.97% to settle at Rs 945.20 on the BSE amid reports that its CEO Rostow Ravanan could resign with L&T becoming a majority shareholder in the IT company.

Meanwhile, the S&P BSE Sensex fell by 5.67 points, or 0.01% to 39,586.41.

On the BSE, 55,000 shares were traded in the counter so far compared with average daily volumes of 31,000 shares in the past two weeks. The stock had hit a high of Rs 953.80 and a low of Rs 912.25 so far during the day. It hit a 52-week high of Rs 1,181.90 on 11 September 2018 and a 52-week low of Rs 752.60 on 26 October 2019.

According to media reports, MindTree chief executive officer (CEO) Rostow Ravanan is likely to resign in the coming weeks with Larsen and Toubro (L&T) becoming a majority shareholder in the mid-sized IT company.

L&T had initiated a hostile takeover of MindTree earlier this year and has since then expanded its shareholding to a majority stake through the ongoing open offer.

MindTree founders have supported Ravanan's continuation as CEO to ensure business continuity, but given the developments over the past few weeks, he is expected to step down soon, reports added.

L&T made an open offer to the shareholders of MindTree to acquire up to 5.13 crore shares, or 31% equity, at Rs 980 per share. The open offer started on 17 June 2019 and it closes on 28 June 2019.

As per the data on the BSE at 15:30 IST today, 27 June 2019, 5.54 crore shares had been tendered in the L&T's open offer, representing a subscription of 108.09%.

Prior to the open offer, L&T's total shareholding in MindTree stood at 28.90%. L&T invested strategically to take control over MindTree. First, it bought around 20% stake held by CafCoffee Day (CCD) founder V.G. Siddhartha and two of his firms in April. Subsequently, L&T bought 8.58% stake from other shareholders, and this resulted total ownership to 28.90% before the company's open offer started on 17 June.

On a consolidated basis, MindTree's net profit rose 3.76% to Rs 198.40 crore on a 2.92% rise in the net sales to Rs 1839.40 crore in Q4 March 2019 over Q3 December 2018.

MindTree is a global technology consulting and services company.

Powered by Capital Market - Live News