Analysis: Mindtree stake sale is turning out to be a thriller

Mid-tier IT company Mindtree posted strong third quarter earnings. Revenue soared to a record $250 million. Yet, the focus in recent days has been on the impending stake sale of its largest shareholder VG Siddhartha and his group Coffee Day.

It was supposed to be a normal stake sale; Siddhartha was expected to close the sale within this week. But a filing by the company on Saturday revealed a new twist. The Income Tax department has attached Siddhartha’s and Coffee Day's shares, amounting to 4.5 percent of Mindtree, citing potential claims on an ongoing assessment, according to the company.

The I-T department action has triggered speculation that the stake sale may be delayed, though sources familiar with the deal say it is on track.

The stake sale has taken the form of thriller now. Who will acquire Siddhartha's shares?  Besides the I-T angle, a tussle for the stake has also emerged.

L&T Infotech has emerged as the lead bidder but has caused discomfort in the promoter camp, mainly because the takeover could lead to structural changes that could also see the shunting out of the current management. However, SN Subrahmanyan, managing director and CEO of the company, said that the "reports regarding acquisition of Mindtree were purely speculation".

The promoters are now hustling to prop up a rival bid through another investor and have held talks with private equity companies such as KKR as well as some family offices, a company insiders told CNBC-TV18.

Siddhartha meanwhile might just be focused on getting his securities released by the I-T department. Coffee Day is set to file an appeal against the order. Company insiders say they are confident that there are no tax liabilities on Coffee Day and that the shares should be released in a matter of days.

This might just give the promoters a breather to push through a new bidder to thwart L&T Infotech's plans.

But until that happens, this story is turning into a corporate version of Andhadhun.