MUMBAI : Engineering giant Larsen and Toubro Ltd is set to complete its acquisition of Mindtree Ltd with the induction of its three nominees on the Bengaluru-based IT firm’s board.

At Mindtree’s 20th annual general meeting on Tuesday, Mindtree shareholders met the company’s board to deliberate on three critical agendas, which included appointment of three nominees from L&T as directors on its board; approval of a special dividend of 200% per share; and one of Mindtree’s founders Subroto Bagchi’s decision to opt for retirement from the board.

However, during the AGM, the shareholders chose not to ask any questions on these issues. According to two people with direct knowledge of the matter, the shareholders were more curious about the process of transition and business continuity plan after the takeover by L&T.

Mindtree’s public shareholders asked the board whether L&T would merge its IT services subsidiary, L&T Infotech Ltd, with Mindtree, and whether L&T was looking to shift the head office of Mindtree from Bengaluru to Mumbai, according to the two people, who requested anonymity. “Most Mindtree public shareholders favoured the appointment of three executives from L&T as directors on the Mindtree board," said the first person.

The Mindtree shareholders also seemed to be in favour of the hefty dividend payout proposal that was announced by the company in April, the first person added.

On 18 April, while declaring the annual results for fiscal 2019, the Mindtree board announced a total dividend of 270%, or 27 per share, for all shareholders. This included a proposal for a special dividend payout of 20 per share, which was supposed to be approved by Mindtree’s shareholders in Tuesday’s AGM.

“L&T agrees to the special dividend payout for Mindtree shareholders," said the second person, who is close to L&T.

The shareholders’ voting results on the three agendas cited above will be made public by Mindtree on Wednesday.

On 30 June, L&T completed its 10,000 crore hostile takeover of Mindtree through an open offer. Post the public offer, L&T, with a 60.06% stake in Mindtree, has emerged as the promoter, and the single-largest shareholder of Mindtree. Following this, all four founders cum promoters of Mindtree—Subroto Bagchi (non-executive non-independent director of Mindtree), Krishnakumar Natarajan (chairman, Mindtree), N.S. Parthasarathy (executive director, Mindtree) and Rostow Ravanan (managing director and chief executive officer, Mindtree), who had been vociferously resisting the hostile takeover, resigned from Mindtree’s board.

On 20 June, Mindtree proposed to appoint S.N. Subrahmanyan, CEO and managing director, L&T, Jayant Damodar Patil, whole time director and senior executive vice-president of L&T’s defence business, and Ramamurthi Shankar Raman, chief financial officer of L&T as directors on the Mindtree board.

On Tuesday, public shareholders voted in favour of these appointments, said the first person, adding the shareholders asked the board about the process of integration. “They also asked if there will be retrenchment after the takeover or not," he added.

In his speech at the AGM, Subrahmanyan said: “Mindtree is a modern-day startup with a unique culture, which has evolved into an institution in its own right. Full compliments to the founders/promoters of Mindtree, all first-generation entrepreneurs, for creating a billion-dollar revenue business earning over $100 million profit and 40% return on capital built from scratch within 20 years."

The CEO of L&T said the engineering behemoth can add value to Mindtree and its stakeholders. “Mindtree will be kept distinct from L&T Infotech (LTI), L&T Technology Services (LTTS) and the recently-formed business division L&T-Nxt. These entities would run at an arm’s length. There are other major conglomerates in India like Tata, Mahindra, Hinduja and HCL which have also been running multiple IT companies successfully."

L&T Infotech offers services to banking, finance, manufacturing, oil and gas, media and healthcare sectors. On the other hand, Mindtree’s clients are in retail, hospitality, communication and high-tech. “They operate in different areas, with minimum client overlap," said Subrahmanyan.

“L&T can provide further impetus to long-term growth of Mindtree by way of board-level oversight and relevant client connects. We will be able to harness these relationships for the benefit of Mindtree’s stakeholders…While L&T does not have any concentrated ownership, in spirit every employee is an owner. Being a professionally run organization, any employee, like in my case, can dream to become the CEO one day. Growth in L&T is purely on the basis of performance. Meritocracy drives decision making within L&T group," said Subrahmanyan.

Subrahmanyan said L&T, as the new promoters of Mindtree, will strive to provide new age technologies, services, digital and content in an ever more increasing manner to take the organization forward.

L&T is one of the largest companies in the country with total employees of more than 420,000.