Too soon to comment, will wait for board decision: Mindtree Exec Chairman Natarajan on L&T offer

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Even as the Independent Director's Committee is evaluating the open offer of Mindtree shares by L&T, Mindtree's Executive Chairman Krishnakumar Natarajan gave Moneycontrol an insight into the ownership battle, the company's relationship with customers and the way forward.Q: Mindtree has decided against a share buyback after the March 26 meeting. Could you elaborate on the course of action from here on?

A: The board functions in unison and there are a tremendous number of opportunities and options available. Our key focus now will be to ensure that the culture, talent and strategy of Mindtree do not get disturbed. The board will evaluate options keeping in mind the interest of shareholders, customers and Mindtree Minds. Until the time any decision is taken, it is inappropriate to make any assumptions or comments.

Q: There are reports that independent directors believe accepting the deal would be better for the organisation. If the committee of independent directors decides that accepting the open offer is better, would the promoters continue?

A: The Mindtree management has complete support from our board.

By every important measure, this proposed deal does not make much sense. Our growth prospects are as strong as ever. Mindtree has enjoyed an 18X appreciation in market cap in the last 10 years. A report this year by JP Morgan analyses IT services companies over different time periods 1/3/8 and 10 years. On seven key parameters by which listed companies are judged, Mindtree is number one or number two on each parameter in every time period. The stark mismatch between Mindtree and LTI seems to guarantee that combining entities would be a major disappointment to all involved – a point that has been widely reinforced by industry experts via the media.  Hence, we should not speculate until we have any recommendation from the Independent Directors Council and till the board comes to any conclusion.

Q: The founders have called L&T's takeover hostile and it would be value destructive to the company. You have also mentioned how the culture of the two companies is different. But analysts also say the company did not take action sooner since you were aware of the situation since November. Could you comment on that?
A: The company fully supported the selling shareholder. Most experts agree with us that this takeover attempt will end in failure and be a disappointment to all involved, especially the shareholders. To give you some insight into how a business like ours is able to be so successful, please understand that Mindtree primarily competes with companies 10-20 times our size. We compete rather effectively because “Fast Beats Large.” We have grown twice as fast as the market by winning more than our fair share because our scale plays to our advantage.

Cultures are different. And sometimes I think you need to be very sensitive to that because if you don’t understand the difference then potentially it could lead to value destruction for stakeholders. And in a business which is very people driven, I think the softer aspects are extremely important. This is a major reason why we are able to recruit and retain the industry’s top talent, and our culture is why our clients stay with Mindtree for the long-run. Our amazing culture is reflected in our attrition levels at ~13 percent which is much lower than the industry average of > 15 percent.

Our large shareholders are completely aligned with Mindtree’s interests. They are supporting us enormously because this team, through the strategy and the culture of the company has delivered exceptional results. Our investors have recognized that Mindtree is a high performing organisation with a great management team and have created a long term value. Early this week, one of the large institutional investors came out openly and wrote a piece in a leading paper on why Mindtree is demonstrably exceptional and how the management has been instrumental in developing a unique organizational culture that delivers exceptional results to clients and shareholders.

Q: It is a difficult time for Mindtree. What's the mood in the company? What are you doing to keep up the employee morale?
A: The outpouring support from Mindtree minds on social media under the hashtag- #MindtreeMatters - provides a transparent view of how they feel. They are very supportive of an independent Mindtree and opposed to this hostile takeover.

Without question, the expertise and dedication of Mindtree minds are the primary underpinnings of our success and while this often sounds like a cliché – it is not at Mindtree. We have stood apart for 20 years thanks largely to our nurturing, collaborative, learning-oriented culture, which makes them feel valued. Our amazing culture is reflected in our lower than industry attrition levels. We are in continuous conversations with our teams – both in small group meetings as well as town halls. We are encouraging Mindtree Minds to remain focused on their primary objective: adding real and measurable business value to our clients and delivering a truly different experience of working with Mindtree.

Q: Has any of the clients raised concerns about the recent developments?

A: We have complete support from our clients and we are committed to deliver excellent services for them. A couple of clients went on LinkedIn and to share their experience and how Mindtree was a great partner to them. They said: we are there to support you and tell us how you want us to support you. Other clients feel it’s a change of shareholder and they are not concerned about it at all. We are actively working with all the clients to that extent we have upped our engagement with them substantially. They are also confident that we will cross this and it is a storm which will just blow over.

Q: Founders have drawn flak from a section of analysts, who say that Mindtree is fighting a losing battle. Can you comment on that?

A: To be honest, we don’t see it as a battle. We are focused on presenting our positives to our shareholders and tell them that we do have a bright future. We think that’s the most important message we are sending and we are getting very positive responses from them.