Venture capital firm Walden International has sold almost half of its remaining 9.8 per cent stake in its nearly decade-old investment in IT services firm MindTree Ltd for Rs 90 crore ($18 million) on Wednesday. The investment firm, through its entity Walden Software Investments Ltd, had been gradually selling its stake in MindTree over the past three years.
The venture capital firm invested Rs 23.68 crore in MindTree at Rs 41 per share when MindTree raised its first round of funding in 2000.
On Wednesday, it sold the shares at Rs 496.23 a unit, translating into 12x return on its original investment.
The venture capital firm had invested in the company 12 years ago, when Global Technology Ventures (GTV) also co-invested in the $9.5 million deal. MindTree 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 per cent stake three years ago, netting around Rs 230 crore ($47 million at that time).
Walden’s exit comes even as the private equity investor Nalanda Capital has gone long on the company. The Singapore-based PE firm recently increased its holding in MindTree Ltd by another 2.35 per cent for a total consideration of $9.36 million (Rs 45.744 crore). The private equity firm, which focuses on public-listed Indian companies, has now increased its overall stake to 11.19 per cent.
Nalanda initially bought into MindTree in February 2009, buying close to 2 per cent stake from Walden International.
VG Siddhartha’s group holding company Coffee Day Resorts Pvt Ltd has also been the company’s stake held by former chairman and co-founder Ashok Soota. The group holds nearly 18 per cent stake in MindTree through Global Technology Ventures and Coffee Day Resorts.
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 a few years ago.
Soota had recently exited the firm by selling his remaining 3.5 per cent stake in the company to entrepreneur VG Siddhartha’s group holding firm Coffee Day Resorts. He is now busy scripting growth plans for his new project called Happiest Minds Technologies Pvt Ltd, an IT solutions and services startup, which has again repeated the success of MindTree by roping in various VCs as early investors.