Mindtree: Tryst with the Corporate Control Market
Authors: Bhaskaran P. Bala 
Published: April 2021

The case is structured around the takeover of Mindtree Ltd (ML) by Larsen & Toubro Ltd (L&T) in June 2019. ML was founded and nurtured by a group of software professionals. In two decades, it had blossomed into an enterprise with global presence, US$ 1 billion turnover and a unique organizational culture. In a strange sequence of events, more than 20% of ML’s shares landed in L&T’s lap. L&T grabbed this opportunity and ran a systematic campaign to acquire the company. In about 100 days, L&T achieved its objective and got into the driver’s seat.

The case traces the evolution of ML from a start-up to a publicly held company with global standing. It examines the circumstances and events leading to L&T getting the initial stake in the company; it examines the acquisition campaign of L&T and the response of the top management of ML.

Research Questions

Was there a strategic fit between ML and L&T? Were the capital market processes just and fair to all the stakeholders involved in the acquisition? Was L&T fair, prudent and sensitive in the acquisition process? Was Siddhartha loyal and fair to the founders of ML?

Link to Theory

The theoretical concepts that would enable a better comprehension of the case are: Analysis of strategic fit in M&A situations Capital market: Theory and practice Strategy for corporate control of an enterprise Significance of culture and ecosystem in knowledge organizations

Phenomenon Studied

Leadership styles relevant at different stages of evolution of an enterprise are different. A leader, at a given point of time, is successful when he is able to match his aspirations with the leadership needs of the enterprise at that point of time. The case can be used to demonstrate this phenomenon.

Case Context

Context of the case is that of an emerging infotech enterprise, coming under corporate raid and the unfolding capital market processes. The case highlights the shortcomings of the co-founders, leading to their unseating as also the sensitivity of the incoming management in handling the transition.

Findings

The case demonstrates the ability of the capital market to be fair to all stakeholders ensuring reward for competence and punishment for sloppiness. The case emphasizes the need for co-founders to have an effective strategy for corporate control; only then they could hope to achieve the long-term objectives. The case also illustrates the significance of sensitivity in handling softer issues like people and ecosystem in ensuring long-term success.

Discussions

At the outset, the case may appear to be that of a big fish swallowing a small fish. But a closer scrutiny would reveal the multiple dimensions of the case. Consider the role of Siddhartha. He seeded the idea of the company; he was a financier to it; he remained an investor in the company longer than most of the founders; when he pulled out, the co-founders could not hold the company together. Neither Siddhartha nor the co-founders had the far-sightedness to consolidate their shareholdings for effective control of the company into the future. This would trigger discussions on the differing roles of technocrats, managers, leaders and founders. Another point worthy of discussion would be: How were the co-founders choosing their leaders? Was it by rotation among themselves, or did they engage a set of criteria to identify an incumbent capable of leading a global company?