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Mindtree founders agree to sell stake and exit company; management rejig likely

By Kritika Saxena

With L&T having bought a controlling stake in the company, Mindtree founders have decided to give up the fight and sell their stake, thereby exiting the firm, sources told CNBC-TV18.

The final trigger for this decision was Nalanda Capital, that backed the promoters in the fight, selling its 10.6 percent stake in Mindtree, said the sources, who did not want to be named.

“The founders have together agreed to sell their stake. Some founders will be selling via tendering their stake in the open offer, while some may stay on for some time and sell stake over a period of time via open market transactions post-L&T deal completion,” said a source close to the development.

The sources added that Subrato Bagchi, who was the most vocal on his views against the L&T acquisition, is one of the founders set to tendering his 3.1 percent stake in the open offer.

The promoters hold 13.32 percent stake in the company, of which the founding promoters together hold 8.96 percent -- Krishnakumar Natarajan (3.72%), Subrato Bagchi (3.1%), NS parthasarathy (1.43%) and CEO Rostow Ravanan (0.71%).

Family members of the founders, individuals and foreign promoter LSO Investment make up the remainder of the promoter shareholding.

“Out of the founders, Krishnakumar Natarajan has been the most hands-on and involved with the company. He may want to stay on to help the board and company transition into the new promoters,” added the source.

The founders and Mindtree are yet to respond to the CNBC-TV18's queries.

Management rejig likely?

With L&T’s acquisition of controlling stake now imminent, CNBC-TV18 learns that the group may look at management rejig. According to the sources, CEO Rostow Ravanan has already indicated his intent to resign from the post once L&T’s acquisition is complete and once a clear successor is identified.

Like KKN, Ravanan also wants to ensure a smooth transition and seeks to exit with as less tremors as possible. A sudden exit of Ravanan would trigger worry amidst employees and may even lead to an increase in attrition in the near to medium term, something even L&T would want to avoid.

L&T did not respond to CNBC-TV18’s query on the same.

Mindtree open offer

L&T’s open offer for Mindtree was launched on June 17 and closes on June 28. So far Nalanda Capital (10.6% stake) and Amansa Capital (2.77% stake) have sold their stake in Mindtree via the open offer.

The sources indicated that aside from Subrato Bagchi, Premji Invest (1%) Arohi Capital (2.5%) and UTI MF (2.9%) may also tender their shares in the open offer.