Ashok Soota, former chairman of mid-tier IT firm MindTree, has sold half of his 11% stake in the firm, via a block deal on Thursday morning on the National Stock Exchange. According to Wednesday?s closing price of R392.65, the deal could be worth R95.61 crore.
Although Soota said he did not know who the buyer was, MindTree executives confirmed that the stake was picked up by Global Technolgy Ventures (GTV), an early investor in the company. VG Siddhartha, the founder of GTV, also owns the coffee chain Cafe Coffee Day.
GTV?s holding, post the deal, now stands in the range of 12%. The sell saw promoter and promoter group holding in the company dwindle to 26.4% from 31.9%. If Soota completely exits the stake, the promoter share would fall to 20.8%.
?I sold 2.2 million shares. Quite a significant part of it will go towards funding my new firm Happiest Minds Technologies. I am in no rush to liquidate rest of my stake in MindTree. That will be done gradually and not all of it needs to be liquidated. Having founded and run the company, I would like to have some stake in the firm,? Soota told FE.
The deal boosted MindTree shares 8.77% on the BSE; the stock closed at R392.65 after hitting an intraday high of R426.60. ?Global Technology Ventures is an investor in MindTree since 1999; they are one of the oldest investors,? MindTree CFO Rostow Ravanan said, adding that the buy implied that the investor had faith in the strong fundamentals of the company. Soota, too, said there was no reason to worry about the falling promoter stake.
?I don?t think this will really change any equation in the boardroom. This deal will not impact the promoter group,? an analyst who did not want to be identified said.
GTV started under the Sivan Securities Group, which included the erstwhile Sivan Securities Ltd, an investment banking and securities broking company and the R1,000 crore plus Amalgamated Bean Coffee Trading Company, India?s largest coffee conglomerate. Today, the broking arm operates as Way2Wealth Securities while the equity research and investment banking arm has evolved into GTV. GTV?s portfolio includes MindTree, Global Edge and Magnasoft in the IT services space, Liqwid Krystal, NetMagic in the internet infrastructure space, Ittiam in R&D and products business. GTV specialises in early stage start-ups and late-stage funding in technology ventures. The firm typically invests between $0.5 million and $5 million in its portfolio companies, according to one estimate.