L& T and Mindtree: A case on ownership change and the storm in the coffee cup
Objectives: The case discusses how a group of ten founders started an information technology (IT) company called Mindtree and the strategies taken by them to build the company. Twenty years later, infrastructure company Larsen and Toubro Ltd (L&T) got a chance to own a twenty percent stake in Mindtree from one of the initial investors. The case outlines the calculated steps that the L&T took to increase the stake, resisting the moves made by Mindtree’s founders to block the deal and eventually owning more than sixty percent of the information technology company. This will help students on entrepreneurship to appreciate the need for building companies and protecting it from hostile takeovers. possibility of developing products without using external funds and understand the need to build ecosystem platforms capable of adding multiple products. Methods: The case has been written using secondary data from published sources. Divided into three parts, the case starts with how the founders tried to create a differentiated company and moves on to the strategies and missteps made by them, leading to differences on the company’s direction. The third part discusses how Larsen and Toubro got a chance encounter to own Mindtree and through a sequence of planned moves, managed to get a majority stake in the company. Findings: The case provides a unique perspective on an IT company that was built from scratch by first generation entrepreneurs and which went public within eight years of starting up. However, differences among the founders on the direction of the company and failure to protect it left the company open for takeover from an unexpected source.