MindTree raises Rs 100 crore

The mop-up comes in the wake of the company setting aside its Rs 200-crore cash reserves towards the acquisition of Aztecsoft.

The company intends to use the funds for its expansion plans, which include opening up a campus in Chennai to accommodate about 3,000 people. The company has also acquired land for a special economic zone (SEZ) in Whitefield in Bangalore to open its third facility in the city.

Besides, the company has also acquired about 17 acres for a campus in Bhubaneswar, which is expected to be complete by the end of this year, Krishnakumar Natarajan, CEO and co-founder, MindTree, told Business Standard.

Including the recent loans, MindTree has a loan burden of about Rs 180 crore. Last year, it had borrowed Rs 80 crore from HSBC Bank for opening a branch in the city.

Meanwhile, MindTree's open offer for acquiring a 20 per cent stake in Aztecsoft has closed. According to Rostow Ravanan, CFO, MindTree, the company has succeeded in acquiring 17 per cent of the stake for about Rs 70 crore at the end of the offer, which closed on Wednesday.

Including the stake from the open offer, the company has a stake of close to 80 per cent in Aztecsoft and will apply for a court-approved merger process towards August this year. The revenue from Aztecsoft will only start flowing into the MindTree kitty in the next financial year, said Natarajan.

MindTree had cash reserves of about Rs 200 crore at the end of March 2008. The company had spent close to Rs 117 crore to acquire the 32.57 per cent stake in Aztecsoft, which was held by e4e Holdings.

Following this acquisition, the company bought a 30.59 per cent stake in Aztecsoft from the market for about Rs 110 crore. The remaining money for completing the acquisition was funded through internal accruals and the operating profit it made in the recently ended quarter.

The company is also exploring opportunities for acquisitions in India and Europe and will consider it at an appropriate time.

Krishnakumar said the company's focus on Europe has started paying dividends with the revenue share from the continent going up to 24.3 per cent in the first quarter of 2006-07 from Rs 19.2 per cent in the previous quarter.

"The European market is a lot more predictive in terms of revenues and we are seeing a lot of traction during the last 3-4 months. My guess is we will end up in having a revenue share of 26-30 per cent from Europe on a steady basis, going forward," he added.

Currently, the US contributes about 61 per cent and APAC region, excluding Japan, contributes about 15 per cent to MindTree's consolidated revenue.