Mindtree will continue to operate as a separate entity, almost without conflict with LTI: CEO of Lu0026T
NEW DELHI: Larsen and Toubro , which recently acquired a majority stake in Mindtree, said on Monday that the IT company will run as a separate entity and operate at a distance of one arm from the technology units of the construction commander. There is no direct conflict between Mindtree and L u0026 T Infotech (LTI) as they operate in vastly different areas with a minimum client overlap, L u0026 T CEO and managing director SN Subrahmanyan said, asserting that no position is sought to be disturbed at Mindtree and no changes are being contemplated right now.
Lu0026T will focus on continuity as a key issue in the administration's transition, and the announcement of a new executive director for the IT services firm will be made in due time, he said.
" Mindtree will be run as a separate entity , distinct from L&T Infotech (LTI) and L&T Technology Services (LTTS). The entities would run at an arm's length. It is inappropriate to speculate about the future structure now," Subrahmanyan said in an emailed statement.
Last week, L u0026 T was categorized as a promoter of Mindtree, having acquired 60.06 per cent stake in the company. Mindtree co-founders and board members Krishnakumar Natarajan (president), Rostow Ravanan (executive director) and Parthasarathy NS (vice president) left the company on Friday.
The development saw Mindtree shares falling 10.43 per cent to close at Rs 773.95 on the BSE on Monday.
Continuity will be the key theme in the management transition ... No position is sought to be disturbed at Mindtree, and no changes are contemplated right now There will be a new CEO for Mindtree, the announcement about which will be done in due course, Subrahmanyan said.
L u0026 T's takeover of Mindtree marked India's first-ever hostile takeover in the IT space. The infrastructure giant had bought 20.32 per cent shares in Mindtree from V G Siddhartha and his coffee enterprise for over Rs 3,000 crore in March.
Later, it reinforced its participation with more purchases of shares in the open market, before making an open offer for an additional 31 percent, taking its share to more than 60 percent.
Last month, L u0026 T had also secured three board positions at Mindtree, bringing in Subrahmanyan, Jayant Damodar Patil and Ramamurthi Shankar Raman. Their appointments are effective July 16, when Mindtree is scheduled to hold its annual general meeting (AGM).
Subrahmanyan noted that LTI offers services to sectors like banking, insurance, oil and gas, and manufacturing, while Mindtree 's clients are in consumer packaged goods, retail, travel and hospitality and high-tech sectors.
They operate in very different areas, with minimal client overlap. There is almost no chance of a direct conflict between the two entities, Subrahmanyan clarified.
He said that a council would be formed at an appropriate time in the future, where good ideas can be exchanged so that the best practices of one company can be adopted by the other.
Lu0026T is a professionally managed company ... Through our businesses in Lu0026T, we have a large network of relationships with client partners and whenever possible, we build 360 degree relationships with customers. We have been able to take advantage of this to benefit LTI he said.
We are confident that we will be able to harness these relationships for the benefit of Mindtree's stakeholders, he added.