MUMBAI (Reuters) - 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 channel CNBC-TV18.
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 U.S.
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 six months.
“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 short term.”
Additional reporting by Swati Pandey and Kaustubh Kulkarni; Editing by Rajesh Pandathil