Venture capital firm Walden International, through its entity Walden Software Investments Ltd, seems to have started a gradual exit from its nearly decade-old investment in IT services firm MindTree Ltd. The firm has sold over a 4% stake in the Bangalore-based company, reducing its stake from 15.77% as per March end, show filings made to Bombay Stock Exchange (BSE).
According to VCCircle’s calculations, the San Francisco-headquartered VC firm would have netted between Rs 75 and Rs 95 crore from this sale. The VC firm offloaded most of this stake after August this year, when MindTree was trading well over Rs 500 per share.
As of October-end, Walden still holds an 11.46% stake in MindTree, which would be worth around Rs 260 crore as per the prevailing market capitalisation of around Rs 2,300 crore.
The venture capital firm invested Rs 23.68 crore in MindTree at Rs 41 per share. This was during MindTree’s first round in 2000, when Global Technology Ventures (GTV) also co-invested in the $9.5-million deal.
It raised another $14 million in 2001 from Capital International’s PE arm and Franklin Templeton, along with its existing investors. Capital’s PE arm sold its entire 10.97% stake earlier this year, netting around Rs 230 crore ($47 million). GTV still holds nearly 7% stake as of September 30, 2009.
PE firms like Nalanda Capital and SAIF Partners have, in the last one year, lifted stake in MindTree from the open markets. While SAIF recently exited earning a clean 2x, Nalanda has increased its holding from 2.53% in March to 3.75% as of September, 2009.
The exits of Mindtree’s early investors come as the firm is celebrating 10 years of its existence. It has said that it aims to achieve over $1 billion revenues by March, 2014. MindTree reported revenue of $269 million for FY09 with a profit-after-tax (PAT) of $11.4 million.
MindTree is one of India’s most successful IT companies backed by venture capitalists. The firm was set up in 1999 by 10 senior IT professionals from companies like Cambridge Technology Partners, Lucent Technologies and Wipro. Headed by Ashok Soota (a former Wipro hand), MindTree acquired mid-tier outsourcing product development (OPD) and testing player Aztecsoft, for around Rs 400 crore in one of the biggest deals in the domestic IT space last year.