L&T assures Mindtree shareholders of further impetus to long-term growth

Mindtree’s new promoter Larsen and Toubro (L&T) Tuesday assured shareholders that it will provide further impetus to the IT firm’s growth by providing board-level oversight and relevant client connects. Earlier this month, L&T became the new promoter of Mindtree after acquiring 60.06 per cent stake in the Bengaluru-based company. Following this, Mindtree co-founders and board members Krishnakumar Natarajan (Chairman), Rostow Ravanan (Chief Executive Officer), and Parthasarathy NS (Vice Chairman) quit the company.

Speaking at Mindtree’s AGM in Bengaluru, L&T CEO and MD SN Subrahmanyan said he believed that L&T, with its experience and track record of managing two successful IT businesses, can add value to Mindtree and its stakeholders.

“L&T can provide further impetus to long-term growth of Mindtree by way of board-level oversight and relevant client connects. We will be able to harness these relationships for the benefit of Mindtree’s stakeholders,” he said. He complimented Mindtree founders and former promoters – who are first generation entrepreneurs – for building a “unique culture” and creating a billion-dollar revenue business entity.

“Mindtree originated with a set of professional founders who had nothing other than their skills and a shared sense of purpose to create something special. This shared mission, passion and spirit of ownership contagiously spread across multiple layers of employees, leading to a unique organisational culture that delivered exceptional results for clients and shareholders,” he said. Subrahmanyan asserted that while L&T manages multiple IT businesses that can add value to Mindtree and its stakeholders, “Mindtree will be kept distinct from L&T Infotech (LTI), L&T Technology Services (LTTS) and the recently formed business division L&T-Nxt”.

“These entities would run at an arm’s length. There are other major conglomerates in India like Tata, Mahindra, Hinduja and HCL which have also been running multiple IT companies successfully,” he said. Subrahmanyan said the management will be focused on delivering best levels of service to clients.

“We will strive to provide new age technologies, services, digital and content in an ever more increasing manner to take the organisation forward,” he added. L&T had previously also stated that there is no direct conflict between Mindtree and L&T Infotech (LTI) as “they operate in vastly different areas with a minimum client overlap. L&T’s takeover of Mindtree marked India’s first-ever hostile takeover in the IT space. The infrastructure giant had bought 20.32 per cent shares in Mindtree from V G Siddhartha and his coffee enterprise for over Rs 3,000 crore in March. Later, it shored up its holding with more share purchases from the open market, before making an open offer for an additional 31 per cent stake, taking its shareholding to over 60 per cent.