* Soota sells 5.5 pct at 18.5 pct premium to Wednesday's
* Soota gives no timeline on selling rest of the stake
* Analysts express concern on low promoter holding
* Shares up as much as 19 pct
(Adds Soota's quotes, details, updates share movement)
By Manasi Phadke
MUMBAI, June 30 MindTree Ltd's former
chairman Ashok Soota, who resigned from the company earlier this
year, has sold half of his stake in the mid-sized software firm
at a 18.5 percent premium, sending the stock up 19 percent.
Soota sold 2.2 million shares, or a 5.5 percent stake, at
428 rupees each in a block deal, a premium of 18.5 percent to
the stock's close on Wednesday.
The company confirmed the stake sale.
Soota, however, did not give a timeline on when he would
sell the rest of his stake, in an interview to business news
Promoters together held 31.9 percent in MindTree as of
March, including Soota's 11.1 percent, according to data from
the stock exchange.
The stake was sold to one of the group entities of board
member V.G. Siddhartha, the spokeswoman said. He founded Global
Technology Ventures, which holds 6.11 percent in MindTree,
according to Reuters data.
"With this transaction, the promoter stake has come down
considerably and in any IT company if the promoters' stake is
this low, the company becomes a target for a forced buyout or a
takeover," said a local analyst, who did not wish to be named,
as she is not allowed to speak to the media.
"It would make sense for the promoters to go and vie for
Soota's remaining stake."
In January, Soota, who had co-founded MindTree in August
1999 with nine other industry professionals, resigned citing
personal reasons and said he would finalise plans for a new
business venture shortly after his departure.
Soota's exit had hit investor confidence with the shares
plunging to over 17-month lows on the news, as MindTree had just
undergone restructuring after shelving plans to launch a 3G
smartphone based on Google's Android platform in the
At 2.52 p.m., shares of the Bangalore-based company, which
the market values at $321.32 million, were up 9.16 percent at
394 rupees, after touching an intra-day high of 430 rupees after
the deal. The stock has lost 34 percent of its value in the past
"The block deal is positive in the sense, there is this
buyer who has got into the company at a premium, which means he
is looking at some value in the company," the analyst said.
"So it would restore some confidence among investors in the
(Additional reporting by Swati Pandey and Kaustubh Kulkarni;
Editing by Rajesh Pandathil)