Market grapevine doing the rounds is that a change of guard at Mindtree is likely to happen soon. It has been reported that talk about replacing CEO Rostow Ravanan is gaining pace even as Larson & Toubro (L&T) is gaining upper hand in the tussle with Mindtree founders.
In a huge setback for the founders, Nalanda Capital, the largest institutional investor, sold its shares in Mindtree to L&T, helping the the engineering service conglomerate to notch up 51 percent in Mindtree.
The ongoing rift between the two sides has many reasons, and Ravanan's continuation as the CEO is one of them. The founders of Mindtree hold only 13 percent shares in the company. L&T is reportedly reviewing the management performance at board level and is keen on bringing a new CEO to take the company revenue to $1 billion, the Times of India reported.
The newspaper, however, said there is no confirmation of Ravanan leaving as the company has not found a successor yet. As per reports, the board wil decide on Ravanan's continuation at Mindtree. L&T has already bagged three seats on the 12-member board and will be pushing their agenda with added force.
L&T announced on April 18 that its initial goal was to secure a 26 percent stake in Mindtree from open market and high net-worth individuals. The company eventually wants to acquire 66.32 percent stake in Mindtree for which it has amassed a war chest of Rs10,700 crore.
The founders of the Bengaluru-based company strongly opposed the takeover bid, touted to be the biggest in the Indian IT sector, trying to counter the takeover bid with emotional appeals to shareholders. However, L&T has been quietly going about the deal.