‘Debt pile, poor market conditions may have forced Siddharth to sell stake in MindTree’

The buyback was not an effort to stall L&T’s bid, says Charman Krishnakumar

Mindtree promoter VG Siddhartha’s huge debt pile might have forced his hand to sell his entire 21.32 per cent stake to L&T. He had borrowed over ₹3,000 crore pledging almost 95 per cent of his stake in Mindtree as collateral.

A top executive of Mindtree says that at one point of time, Siddhartha realised that if he didn’t offload his stake immediately, the valuation of his shares would go down considerably as the market hit by the crisis at IL&FS and DHFL was on a downward spiral. Hence, the rollover of the debt had become difficult. Siddhartha, who sold off his entire stake to L&T, was able to raise ₹3,269 crore out of which he made a profit of ₹2,858 crore.