Mindtree mulling over share buyback proposal amid market speculations regarding exit of largest stakeholder

Must Read

President Ram Nath Kovind appoints new governor for Kerala, Telangana, Himachal Pradesh and Maharashtra

President Ram Nath Kovind appointed new governors for Maharashtra, Kerala, Telangana, Rajasthan, and Himachal Pradesh on Sunday. https://twitter.com/ANI/status/1168037199767457792 Former Union Minister Kalraj...

NRC list for Assam released; Fear looms as 19 lakh people face exclusion

NRC (National Register of Citizens) for Assam has been published at 10 am today. The final list excludes over...

Lateral Entry Era Begins as Union govt. appoints 9 professionals to Joint Secretary posts

The government has appointed its first batch of private professionals to the post of Joint Secretary in various ministries....

Amid market speculation of L&T (Larsen & Toubro) seeking to acquire the stake of largest stakeholder in multinational IT firm- Mindtree, the IT company said on Friday that it might consider a share buyback proposal in its next board meeting scheduled on 20th March.

Although, Mindtree didn’t provided any further specifics such as size of the buyback proposal but as per close sources it could be around ₹1,000 crore. Engineering giant L&T also didn’t commented on the recent developments.

However, in January, A M Naik, executive chairman of the L&T group, confirmed that the L&T was looking at acquiring a stake in Mindtree.

Industry experts and analysts however, have said that a share buyback proposal when a large stakeholder is considering selling his stake is unprecedented and could create problems for any rival technology firm to come on board.

“Looks like there’s a big disconnect between the single-largest shareholder and the management. No company announces a buyback when a large shareholder is trying to sell his stake. As the price goes up, the transaction will be revisited by the interested party. It will now be costlier for any entity to take control of the company,” said V Balakrishnan, former Infosys board member and chairman of Exfinity Venture Partners.

Cafe Coffee Day founder V G Siddhartha’s who owns 21% stake in Mindtree is in the final stage of discussions with many entities including L&T. But with Mindtree founders’ reluctance to sell their stake of 13.32%, the situation has turned tricky.

Earlier, in 2017 Mindtree conducted share buyback of worth ₹270 crore, now it seems to be preparing itself against a hostile takeover. A successful share buyback proposal increases the share prices along with stake of the stakeholders which the current management might use to reward shareholders in a bid to win their loyalty.


Please enter your comment!
Please enter your name here

- Advertisement -

Latest News

R&D centre for clean coal unveiled in Bengaluru

Bengaluru, Sep 16 (IANS) Union Minister of Science and Technology Harsh Vardhan on Monday opened the national centre for...

RBI expands BBPS coverage to all categories

Mumbai, Sep 16 (IANS) The Reserve Bank of India on Monday expanded the Bharat Bill Payment System coverage to included all categories of billers,...

Wanted criminal held in Narela murder case

New Delhi, Sep 16 (IANS) With the arrest of 25-year-old history-sheeter, the Delhi Police claimed to have solved the Virender Maan murder case, who...

GM, TCS launch partnership for global vehicle engineering

New Delhi, Sep 16 (IANS) Automobile manufacturer General Motors and IT major Tata Consultancy Services on Monday entered into a partnership for future global...

Italy resuming a central role in Europe: EU Commissioner

Rome, Sep 16 (IANS/AKI) With its new left-leaning government, Italy, a founder member of the European Union, and the eurozone's third largest economy, is...
- Advertisement -

More Articles Like This