Promoters of mid-sized information services company Mindtree with the tagline 'Welcome the possible' are facing impossible odds in the boardroom battle to save their company from technology and construction conglomerate Larsen & Toubro's (L&T) hostile takeover bid. The promoters have been raising a financial wall fortified with emotional mortar against the L&T stormtroopers at the castle gates.
The entrepreneurs who founded the company in 1999 have gone to the extent to hinting at a possible mass exit of senior staff from the public-listed company in case of a takeover. Their advice to L&T is to build its own IT firm.
An unfazed L&T, however, is sitting on a purse of about Rs 10,700 crore including Rs 3,269 crore that it will pay for the 20.32 per cent stake that Café Coffee Day (CCD) founder VG Siddhartha holds in the company in a bid to amass about 67 per cent of Mindtree equity. The promoters, who failed in their appeal to emotional ties with Siddhartha to prevent his stake sale exposing the company to the forcible management change, then tried to tap big institutional investors and a share buyback promise to fend off a takeover bid.
Mindtree has nearly 20,000 employees and offices in 17 countries with annual revenue of $847 million. Ironically, Mindtree promoters approached L&T six years back seeking substantial investment, but the latter's strategic outlook was against it.
Among the ten entrepreneurs who co-founded Mindtree in 1999, only Subroto Bagchi, Krishnakumar Natarajan and Parthasarathy NS are active with the company now. Ashok Soota, who initially served as the chairman of Mindtree from the days its inception, offloaded his 11 per cent stake in the company in three tranches that lasted until 2012 to Siddhartha. Soota now serves as chairman and found of Bengaluru-based Happiest Minds Technologies.
Subroto Bagchi, a promoter of Mindtree holding 3.1 per cent of the company's equity, has chucked an assignment with the Odisha government to return to Bengaluru to show more hands on deck against the imminent boardroom raid. Bagchi had stepped down as executive chairman of the company in 2016 to make way for Krishnakumar Natarajan to succeed him in the position. Bagchi, however, continued as a non-executive director of the company that had gone public in December 2006 with listing on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). An entrepreneur and author, Bagchi was born in Patnagarh in Orissa (later Odisha) in 1957.
After taking a degree in political science from Utkal University, he joined the state government's industries department as a clerk in 1976. One year later he joined DCM as a management trainee. Later, Bagchi worked with different computer companies in various departments until 1999, including Wipro Limited where he served as chief executive of global research and development. He launched Mindtree in 1999 with nine other co-founders.
Bagchi became the company's chairman in 2012 and held the post until he stepped down in January 2016. At the invitation of the Odisha chief minister, he took on the full-time role of chairman of the Odisha Skill Development Authority with a Cabinet rank in May 2016. Now he is back to rescue the company he helped nurture into a global presence. Bagchi's philanthropic involvements include serving on the board of the not-for-profit White Swan Foundation for Mental Health that works in the area of mental health awareness.
Krishnakumar Natarajan, who took over as the executive chairman of Mindtree from Bagchi in 2016, holds about 3.72 per cent of the company's shares. Born in Tamil Nadu, Krishnakumar is a mechanical engineer by profession having graduated from Chennai's Guindy Engineering College. He took his Master of Business Administration from XLRI, Jamshedpur.
He worked in Wipro from 1982 to 1999, including in the e-commerce division. He joined other entrepreneurs to launch Mindtree in 1999 and his initial tasks included the development of the company in the US and later on headed the company's Eurozone operations. A former chairman of the software industry body Nasscom, Krishnakumar has also served as an emerging companies forum. Krishnakumar, known among friends as KK, is also active with several trade bodies including the Manufacturers Association for Information Technology (MAIT) and the Confederation of Indian Industry (CII).
Another former Wipro man, executive vice-chairman and chief operating officer Pathasarathy NS, who holds 1.43 per cent shares of Mindtree, now heads the People Function, Kalinga, the company's global leading centre, mergers and acquisition division, investor relations and risk management. He also heads the Asia-Pacific business division. Parthasarathy's early career with Wipro was as general manager of technology solutions for large customers.
He also works avidly in programmes aimed at bridging the gap between industry and academia. Parthasarathy has a Masters from BITS Pilani and an M.Tech. in Computer Science from IIT, Kharagpur. He is also an alumnus of the Harvard Business School.
Though not part of the initial group that promoted the company, Rostow Ravanan, the chief executive officer and managing director, who has a 0.71 per cent stake in the firm's equity, plays a key role in the resistance to the takeover. A former chief financial officer of the company, Rostow led Mindtree's IPO of 2007 that was oversubscribed more than 100 times.
An alumnus of Harvard Business School, Rostow started his career at KPMG Corporate Finance and specialized in strategy consulting, mergers and acquisitions. Rostow also worked with Lucent Technologies as a business value manager responsible for long term strategic planning at Bell Laboratories' product realization centre in India. Rostow is a member of the Institute of Chartered Accountants of India and the Institute of Company Secretaries of India.