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Corporate houses, mutual funds raise exposure to Mindtree in Q4

Debasis Mohapatra/Bengaluru 11 Apr 19 | 11:32 PM

While Mindtree was busy fighting the takeover bid from L&T, some corporate houses, domestic mutual funds (MFs), and even some foreign institutional investors increased their stakes in the IT services firm.

According to the shareholding pattern disclosures filed by the Bengaluru-headquartered IT firm, corporate houses hiked their exposure by close to 4 per cent at 23.41 per cent by the end of March quarter, against 19.53 per cent reported in the December quarter. Details of these entities were not available as they didn't cross the 1 per cent shareholding threshold for mandatory disclosure. Domestic MFs also increased their holding. These funds, which had combined holding of 8.34 per cent during the December quarter, raised their exposures to 9.02 per cent for the quarter ended March. While UTI-Equity Fund, with 2.90 per cent stake, and L&T Mutual Fund Trustee, with 1.08 per cent holding, were the only two MFs with more than 1 per cent stake in Mindtree during the December quarter, DSP Midcap Fund and Franklin Templeton Mutual Fund were the new entrants in the March quarter.

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The combined holding of foreign portfolio investors (FPIs), however, saw a marginal dip in the last quarter with the complete exit of one institutional investor. Stichting Depositary APG Emerging Markets Equity Pool, which held 1.04 per cent in the IT firm at the end of December 2018, sold its entire holding in the March quarter.

Filings showed the combined holding of FPIs in Mindtree dropped by 92 basis points to 39.26 per cent at the end of March, as compared to 40.18 per cent recorded in December quarter. Some of the long-term investors in Mindtree, however, raised their holdings during this period. For instance, WGI Emerging Markets Smaller Companies Fund hiked its stake to 1.76 per cent from 1.65 per cent. Similarly, Arohi Emerging Asia Master Fund increased its stake to 1.52 per cent from 1.18 per cent in the December quarter. Another FPI, Vanguard raised its aggregate holding to 2.63 per cent from 2.51 per cent recorded in the preceding quarter. With the share-purchase agreement with L&T, V G Siddhartha and his holding companies were not shown as the shareholders in the IT firm. Rather, an escrow account — SCB Escrow A/C - Project Carnation, Lotus & Marigold — held 19.95 per cent in the mid-tier IT firm.

Sources in the know said that all of Siddhartha's pledged shares to his creditors have been aggregated in this escrow account.

“Corporate bodies have increased their exposure in the firm. We may not be able to know which bodies have bought shares unless there is specific disclosure in this regard," said T V Mohandas Pai, an active investor who is also a former chief financial officer of Infosys.

Mindtree board is scheduled to meet on April 17 for approving the annual financial statements and to deliberate on the proposal of announcing special dividend to shareholders.

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