InvestorQ : Why has the stock of Mindtree fallen so sharply after L&T took over the management of the company? The stock is down more than 25% from the open offer price offered by L&T.
Rashi Mehra made post

Why has the stock of Mindtree fallen so sharply after L&T took over the management of the company? The stock is down more than 25% from the open offer price offered by L&T.

Answer
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sarah Leo answered.
1 year ago


A day after L&T assumed management control of Mindtree by acquiring 60% and becoming the official promoter of the company, the entire top management representing the original promoter group had resigned from the company. This did not go down well with the investors and there was selling in the open market. Also the fact that one of its largest institutional shareholders, Nalanda Capital, had also chosen to sell out to L&T did not go down well with the markets as they are more comfortable if the large institutional investors stay on.

There are also worries about whether a company like L&T with its traditional expertise in project execution can manage a new age company like Mindtree is topmost in the minds of investors. Basically, markets are not very excited by the change in promoters.