Mindtree comes under bigger tree: L&T

BENGALURU: As

Mindtree

founders Krishnakumar Natarajan, Rostow Ravanan,

Subroto Bagchi

and NS Parthasarathy stood together bidding adieu to shareholders, the message from the company’s new owner, L&T, was comforting at the 20th AGM in Bengaluru on Tuesday.


L&T CEO SN Subrahmanyan said Mindtree is not being snatched. “It’s just coming under the bigger tree of L&T,” he said.

Subrahmanyan reiterated that Mindtree will continue to run as an independent entity and would operate distinctly from the engineering conglomerate’s two other tech entities – L&T Infotech (LTI) and L&T Technology Services (LTTS). He said L&T will focus on “continuity” as a key theme in the management transition. “We believe L&T with its experience and track record of managing two very successful IT businesses can add value to Mindtree and its stakeholders. There are other major conglomerates in India like Tata, Mahindra, Hinduja and HCL which have also been running multiple IT companies successfully,” he said.

L&T has acquired 60.6% stake in Mindtree after making an unsolicited $1.6 billion bid in March this year. Subrahmanyan said L&T can provide further impetus to Mindtree’s long-term growth by way of board-level oversight and relevant client connects.

Some shareholders asked if L&T would oppose the special dividend Mindtree announced to celebrate the company’s twin achievements of exceeding $1 billion in revenue and its 20th anniversary. Subrahmanyan clarified that they are fully supportive of the dividend. The Mindtree board had recommended a Rs 443-crore dividend bonanza in April.

Many shareholders recounted the founders’ entrepreneurial spirit and the spirit of giving back to the community, especially their work with people with disabilities. Some had concerns about the company’s strategic direction once the founders leave, some about layoffs, and some about the recent share price slide.

“The founders are all first-generation entrepreneurs, who created a billion-dollar revenue business earning over $100 million in profit and 40% return on capital. We are happy with what the promoters have done. It’s sad that they have taken the decision to move on. Their contribution cannot be captured in words. It’s etched in the history and legacy of Mindtree,” Subrahmanyan said.

Asked if Mindtree would be delisted, Subramanyan said Mindtree will be kept as Mindtree. He also clarified that the registered office will not move from Bengaluru to Mumbai.

“First, only one in twenty thousand ideas becomes a billion-dollar business. We beat incredible odds to get here. And second, we have arrived here in a sustainable way; the organisation is incredibly healthy and we did not take any shortcuts. What makes it even sweeter is that we got here faster than many of our larger peers” – Krishnakumar Natarajan, executive chairman, Mindtree


“I would like to express deep gratitude to Subroto (Bagchi) for many things that has shaped me professionally and personally. In many ways, all of us at Mindtree think of him as the mother of Mindtree. Partha and KK, everything that you see, I couldn’t have done that without your support” – Rostow Ravanan, CEO, Mindtree


“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" SN Subrahmanyan, CEO, L&T.

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