Assuaging concerns of Mindtree shareholders, its new promoter L&T on Tuesday said it was fully supportive of the dividend payout decision taken up by the firm’s current management.
Attending the 20th annual general meet (AGM) of the Bengaluru-headquartered information technology services firm, L&T’s Managing Director & Chief Executive Officer S N Subrahmanyan also said the company was in safe hands with the engineering major as the promoter.
“One of the shareholders said we have objected to the dividend (payout). On the contrary, we have fully supported the dividend,” said Subrahmanyan. “Mindtree is not being snatched and it comes under the bigger tree called L&T.”
After attaining $1-billion revenue mark, Mindtree in April had announced payout of Rs 3 of interim dividend, Rs 4 of final dividend and Rs 20 of special dividend per share on the face value of Rs 10 each.
L&T was said to be critical of the decision to offer 200 per cent of special dividend as it was seen as a move to raise the cost of acquisition for the company. This move will not only help L&T to create goodwill among the shareholders, it will yield the new promoter around Rs 240 crore.
Replying to queries of shareholders, L&T’s top management also clarified that Mindtree would continue to run as an independent entity like its other IT portfolio companies and it had no plans to delist it in the near future.
“We have already stated that Mindtree will be run and traded under the same name. What will happen in the future that I can’t predict. We have three IT companies out of which two are listed. This will be the fourth one and it will continue to be like that,” Subrahmanyan said.
He added: “Also, the registered office of Mindtree will continue to remain in Bengaluru.”
While most shareholders were keen to know the future road map for Mindtree, they welcomed L&T as the new promoter of the company.
“L&T is a professionally managed company, and at a time when scale is important for the IT industry, both companies can draw a lot of synergy and compete with the likes of TCS and Infosys,” said Ravi Venkatachan, a shareholder of Mindtree.
Some shareholders even urged L&T to continue with the current management team with support from the cofounders. “Both L&T and founders should work together for enhancing shareholders’ value,” said Ramamurthy, another shareholder. It was also an emotional moment for the four cofounders of Mindtree who were probably attending the company’s AGM as promoters for the last time.
Earlier this month, the company’s CEO Rostow Ravanan, chairman Krishnakumar Natarajan and chief operating officer Parthasarathy N S had resigned from all their positions while another cofounder Subroto Bagchi’s term as non-executive director ended on Tuesday.
“The AGM ended smoothly though the disconnect in body language of the cofounders (of Mindtree) and L&T nominees were very much evident,” said a long-time shareholder while leaving the AGM venue.―Business Standard