V G Siddhartha, Coffee Day Group’s chairman who was one of the first venture capitalists to back MindTree Limited more than a decade ago, is once again moving to cement his stake further in this mid-tier software exports company. The 51-year-old entrepreneur on Monday announced that he has acquired 3.84 per cent stake in MindTree for around Rs 95 crore from another early venture fund — Walden International. With this, Siddhartha — along with two of his companies Coffee Day Resorts and Global Technology Ventures — holds little more than 21.5 per cent. The promoter group holds 21.5 per cent.
Siddhartha’s move comes hardly a couple of months after he acquired the 11.8 per cent stake held by Ashok Soota, who quit as chairman of MindTree last year. Prior to that move, Siddhartha held 6.54 per cent in the company.
Siddhartha’s step to buy out Soota’s stake was precipitated after the latter’s sudden exit from MindTree during early 2011 due to various differences among the promoter group. Soota has since started a new software exports firm, Happiest Minds Technologies. For this, he had, in addition to his funding, raised private equity from Intel Capital.
It is understood that Siddhartha has paid out close to Rs 200 crore to effect this transaction. For this, he has raised debt through a non-banking financial company, besides internal resources. Siddhartha has earlier said he would not increase his stake beyond 26 per cent in MindTree.
After a rather rocky 2011, when MindTree revenues and margins were hit, the company for the fourth quarter ended March 31, 2012, posted a 115 per cent growth in net profit at Rs 68.9 crore. The revenues of the company for the same period stood Rs 5,25.7 crore reporting an year-on-year growth of 34.4 per cent. On a full-year basis, the company’s net profit stood at Rs 218.5 crore as against Rs 101.6 crore in 2010-11 registering a growth of 115.1 per cent.
A seasoned entrepreneur who started his career at J M Financial, Siddhartha has 10,000 acres of coffee estates in Chikmagalur of south-central Karnataka, and has expanded his businesses rapidly. His business is valued upwards of $1 billion and ranges from coffee retailing and exports, wealth management, waste management, logistics, furniture, hospitality, granites to SEZ development and food processing.
During 2010, Siddhartha had raised a record $200 million from blue-chip private equity funds KKR, Standard Chartered and New Silk Route in a move to fast expand his bouquet of businesses. Global Technology Ventures has also invested in marquee technology companies, including a chip-design firm Ittiam Software, GlobalEdge Technologies, besides a few others. GTV had a blockbuster exit from its investment in Kshema Technologies when it was sold to MphasiS Software. Bank of America was one of the limited partners in GTV, before being bought out by GTV.
MindTree’s scrip lost 1.2 per cent on Bombay Stock Exchange on Monday, and closed at Rs 604.95 per share.