Engineering and construction major Larsen and Toubro (L&T) has officially acquired controlling stake in Mindtree and has been categorised as the promoter of the Indian IT services company.
"Larsen and Toubro Limited (L&T) has acquired equity shares to an extent 60.06% of the total shareholding of the company and has acquired control and is categorised as promoter pursuant to SEBI (issue of Capital and Disclosure Requirements) Regulations, 2018," Mindtree said in a filing to the Bombay Stock Exchange.
The acquisition of shares took place on Monday, the company said. According to data available with exchange, L&T was holding 9,87,79,179 equity shares in Mindtree as of July 2, 2019.
The development came within months of Mindtree rejecting a hostile takeover bid from the L&T conglomerate, saying that it will not be in the interest of the company or its shareholders.
The hostile bid by the L&T to acquire a controlling stake in Mindtree is the first in Indian software services industry and is rare event in India's corporate sector. L&T group, which owns IT company L&T Infotech and engineering services firm L&T Technology Services, has expressed interest to hike its stake in the company to up to 66 per cent.
The Mindtree's board will now seek shareholders' approval to induct five new members to the board at its annual general meeting on July 16, 2019. Three new non-executive directors from L&T -- S.N. Subrahmanyan, CEO and MD of L&T, Shankar Raman, CFO of L&T, and Jayant Patil, Senior VP, L&T's defence business, as well as two additional independent directors -- Prasanna Rangacharya Mysore and Deepa Wadhwa, will join the board of Mindtree.
Earlier in May, L&T acquired a 20 per cent stake in Bengaluru-based IT services company at Rs 980 per share (for a total of Rs 3,211 crore) from VG Siddhartha and Coffee Day Enterprises through block deals. L&T plans to raise its stake in Mindtree to 66.32 per cent by spending as much as Rs 10,800 crore through a combination of open offer and stock market purchase.
Ahead of announcement, shares of Mindtree closed trade at Rs 906.10, down 0.79 per cent, on the Bombay Stock Exchange on Wednesday.
Edited by Chitranjan Kumar