Billionaire Entrepreneur looks to liquidate stake in Mindtree

Billionaire Entrepreneur looks to liquidate stake in Mindtree, marquee investor KKR looks to step in

Mindtree’s largest shareholder VG Siddhartha is looking to put his stake of Mindtree on the block after serving at the helm of the Company as a strategic investor for the last 19 years through the company’s thick and thin.

VG Siddhartha had stepped down as Independent director earlier this March raising speculations on his exit. VG Siddhartha is a successful entrepreneur who singlehandedly spearheads the retail coffee giant Coffee Day Enterprises as founder and CMD.

The Coffee group Billionaire along with Coffee day Holdings holds about 21% of Mindtree, while, through multiple entities his stake is as high as 26% thereby making him the single largest shareholder in Mindtree.

Siddhartha’s stint in the IT major started as early as 1999 when he entered in as a strategic investor to ride the IT wave which was brewing in his hometown of Bangalore. The Bangalore headquartered Mindtree aced the race to position itself as a leader in the IT industry.

Mindtree saw a 5% growth in Revenue for FY18 at 5463 crores and a bottom line growth of 36% or 570 crores attributed to the Forex tailwind as rupee depreciated against the dollar. Mindtree is making great strides by expanding its presence in the fast growing Cloud space along with moving out of the conventional IT outsourcing to the high margin AI segment.

VG Siddhartha’s stepping down as Independent Director in March raised speculation of his exit from Mindtree to finance cash strapped Coffee Day Enterprise’s ambitious growth and expansion.

Mindtree’s co-founders and promotors who collectively hold 13% of the company have confirmed that they are not looking to liquidate their position. VG Siddhartha’s move is likely going to cause volatility in the short term since his is a substantial stake in the company.

Private Equity firm KKR is one of the front runners looking to absorb a piece of Mindtree along with Japan’s NCE Corp and a large Private Equity Firm which are considering to buy out Siddhartha if things seem favorable.

Mindtree has remained a darling stock to Institutional Investors over the years, with a year-to-date return of 40.5% and a 2-year return of 87%, Mindtree has gone on to be one of the best-performing stocks this year. Mindtree has offered a stable CAGR of 18% over the last five years.