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L&T purchases VG Siddhartha’s 20% stake in Mindtree

L&T purchases VG Siddhartha’s 20% stake in Mindtree
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Engineering conglomerate Larsen and Toubro has completed the stake purchase of software services and consultancy firm Mindtree from its largest independent shareholder VG Siddhartha, according to data published on the Bombay Stock Exchange.

L&T has paid more than Rs 3,200 crore for the 20% stake in the company.

In one of the most high profile hostile takeover bids in Indian corporate history, L&T has bought almost 3.3 crore shares of the Bengaluru-based Mindtree from Siddhartha and two of his entities at Rs 980 apiece, showed disclosures made by the firms under bulk/block transactions.

Following the completion of the transaction, L&T is expected to acquire another 6% over the next few days, increasing its stake to 26% in the IT firm, which will automatically trigger an open offer.

L&T had announced in March its intention to buy 31% stake in Mindtree through an open offer, which will begin on May 14 and close on May 27. L&T has plans to hike its overall stake in Mindtree to 66%, if things fall in place.

Mindtree had crossed $1 billion in annual revenues in the last fiscal year. It reported a 9% growth in net profit for the fiscal’s fourth quarter, which stood at Rs 198 crore, up from Rs 182 crore it reported a year earlier.

Net revenue for the quarter through March jumped 25.6% to Rs 1,839.4 crore, the company said.

Mindtree's founder-promoters, who own a little more than 13% stake in the firm, had opposed L&T's bid.

Mumbai-based L&T has two entities that caters to technology customers - L & T Technology Services and LTI or L&T Infotech. The eight-decade-old group had over $17 billion in revenue and more than a billion dollars in net profit in the last fiscal year.

Earlier this month, the Competition Commission of India (CCI) had approved the deal.

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