From the moment news first broke about L&T’s interest in owning a controlling stake in Mindtree Consulting, speculations about its intentions for the Bengaluru headquartered IT & Tech Consulting firm began doing the rounds of the media. A day after entering into a definitive Share Purchase Agreement (SPA) with Mr. V.G. Siddhartha and his related entities, L&T CEO & MD Mr. S.N. Subrahmanyan spoke about the strategic move at a press event and laid bare L&T’s plans in his own inimitable style. The buy-in, he said, was inspired by the mutual synergies between the two companies. Here are the excerpts from his interaction with the media:
Acquisition to accelerate growth of services portfolio In the last few years, we’ve repeatedly talked about how to take L&T forward and part of that conversation has invariably led to us thinking about the opportunities on the services side. This would broadly entail LTI, LTTS, L&T Finance, and L&T Realty, all of which except for L&T Realty are publicly listed firms. Over the years, each of these businesses has grown well and brought in higher profits. The contracts there are less risky and from an overall portfolio point of view it makes sense for us to grow them faster than some of our other businesses. Mindtree is simply a great opportunity to continue down that path.
It makes perfect business sense A few years ago, L&T was approached by the management of Mindtree but we didn’t show any special interest since our priorities as a company were different at the time. However, when the opportunity presented itself again recently, we seemed better positioned to explore the proposal. As it turned out, from our IT services portfolio point of view the buy-in made enormous business sense. L&T Infotech is predominantly in Banking, Manufacturing, Oil & Gas and Insurance business while Mindtree is into CPG, Retail, Hospitality, Travel, and Technology space. We strongly believe that this is a good addition to our overall portfolio.
Mindtree shall remain independent Our investment in Mindtree will not interfere with its independence and it will be run as an independent company - with its board and its management. L&T at best will provide board oversight, management connect, value addition, and benefits. That is our purpose right now as we move forward.
L&T is the best home for Mindtree We hope and trust that the Mindtree management, its board, stakeholders, and employees take the development positively. L&T is easily the Best Home for it in the country. An emotional shareholder for personal reasons wanted to house his stake in a safe place and from our point of view, we have done the right thing by taking hold of it. We intend to continue in the same manner as Mindtree is being run right now, with the same purpose, same beliefs, same culture, and value systems.
L&T is a company of values We have repeatedly said that L&T’s buy-in should not be a cause for worry to the promoters of Mindtree, its board of directors, employees and stakeholders. We are an 80-year old company with the highest set of governance values. Our leadership has always placed the highest importance on business ethics. From our present Chairman Mr. A.M. Naik, a legend in every respect to Mr. Henning Holck Larsen, one of our co-founders we have always had leadership that’s instilled in us a deep sense of morals and ethics and nurtured a value system that’s stood the test of time.