Mindtree shareholders approve Rs 20 per share special dividend

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Published: July 16, 2019 10:38:32 PM

At the end of June 2019, L&T had 60.06 per cent stake, while founders held about 13.3 per cent stake.

mindtree,l&tThere were speculations that L&T, which acquired Mindtree in a hostile takeover, would oppose the proposal as it would strip over Rs 320 crore off the IT company’s books.

Shareholders of Mindtree, including the new promoter Larsen and Toubro (L&T), Tuesday approved proposal for a special dividend of Rs 20 per share for FY2019.

The special dividend, which is expected to have an outgo of about Rs 328 crore from the books, was proposed by the previous promoters of Mindtree to celebrate the twin achievements of exceeding USD 1 billion annual revenue milestone and 20th anniversary of the company.

According to a regulatory filing by Mindtree, 99.99 per cent (14.39 crore) votes were cast in favour, while 124 votes (0.01 per cent) were against of the proposal at the company’s 20th annual general meeting on Tuesday.
At the end of June 2019, L&T had 60.06 per cent stake, while founders held about 13.3 per cent stake.

Other proposals for payment of Rs 9 per share in interim dividend and Rs 4 per share as final dividend were also cleared with similar support.

There were speculations that L&T, which acquired Mindtree in a hostile takeover, would oppose the proposal as it would strip over Rs 320 crore off the IT company’s books.
Interestingly, post acquiring over 60 per cent stake in Mindtree, L&T has – on multiple occasions – asserted that it will continue to operate the IT firm at an arm’s length from its own tech units.

At the AGM Tuesday too, L&T sought to assuage investor concerns, saying it can provide further impetus to Mindtree’s growth by way of board-level oversight and relevant client connects.

Also read: RBI rejects proposed appointment of ex-interim CEO, other on Religare’s board

Addressing the shareholders of Mindtree for the first time after the takeover, L&T CEO and MD S N Subrahmanyan said the construction major plans to leverage its 360-degree relationship with clients for accelerated growth of Mindtree.

Besides, the proposals to appoint L&T representatives – S N Subrahmanyan (L&T CEO and MD), Jayant Damodar Patil and Ramamurthi Shankar Raman as non-executive directors were also approved at the AGM.
Also, Prasanna Rangacharya Mysore and Deepa Gopalan Wadhwa have been appointed as independent directors.

The mid-sized IT firm is slated to announce its first quarter results on Wednesday. In the March quarter, Mindtree had reported an 8.9 per cent growth in consolidated net profit at Rs 198.4 crore for the March 2019 quarter.

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