Business Today – August 25, 2019

26 I BUSINESS TODAY I August 25 I 2019

to the minutest details.” Siddhartha’s vision was to

make CCD one of the top cafe chains in the world,

and he would say, “I want an Indian brand like CCD

to take the pride of place in Times Square and Or-

chard Street. That will be a moment of pride for India

and us,” recalls Ramki.

DEBT WEIGHT

The period that saw massive expansion, also saw debt

piling up. The company needed funds for both opera-

tions and capex. In 2010, Standard Chartered Private

Equity (Mauritius) II Ltd, KKR Mauritius PE Invest-

ments II Ltd, and Arduino Holdings Ltd (which later

transferred the debentures to NLS Mauritius LLC)

invested close to $149 million. Compulsorily convert-

ible preference shares held by Standard Chartered

Private Equity (Mauritius) II Ltd and the compul-

sory convertible debenture held by KKR Mauritius

PE Investments II Ltd and NLS Mauritius LLC was

converted into equity shares at the time of listing.

By June 2015, the consolidated debt was of around

`2,700 crore.

When CDEL decided to do an IPO looking to

raise `1,150 crore in 2015, it was the IPO the market

had heard of since Bharti Infratel. One of the main

objectives was to reduce the debt by about `630 crore,

so that the debt servicing costs could come down and

money could be used for further investment. CDEL

had raised over `334 crore from anchor investors

ahead of the IPO, while in March, the firm had mo-

bilised `100 crore in a pre-IPO funding from Nandan

Nilekani and Rare Enterprises (promoted by Rakesh

Jhunjhunwala), among others. But the IPO opened

to a lukewarm response. It was over-subscribed 1.8

times, and the non-institutional investors category

only got 53 per cent subscription. On the BSE, the

stock listed at `313 – 5 per cent below the issue price

of `328.

In 2000, through his investment
company Coffee Day Trading
(formerly known as Global
Technology Ventures),
Siddhartha invested in Mindtree
for about 7% stake. Over the
years, he increased it to 20.41%.

“We were really, really lucky
with our first two VCs. He was a
superb investor and he gave us
all the freedom”: Ashok Soota,
Co-founder and former CEO of
Mindtree, told BT in an earlier
interview. (He left in 2011.)

Between July and December
2018, Siddhartha’s pledged
shares increase to 70%

By March 2018, Siddhartha had

quit the board of Mindtree to

concentrate on CDEL.

Former Chairman, Mindtree,

Krishna Kumar Natarajan,

said in an earlier interaction

with BT that Siddhartha was

finding it difficult to spare

10-12 days annually to Mindtree

board commitment.

Siddhartha talked to PE inves-

tors about selling his 20% in

Mindtree.

The sale hit a roadblock as the

tax department attached

these shares for a tax demand

of `625 crore.

The shares were released and

by March 2019, Sidhartha

agreed to sell his entire stake

in Mindtree to L&T at `980 a

share.

This was much to the displeas-

ure of the founders of Mindtree,

who had always counted upon

him as a staunch supporter.

But Siddhartha was under

huge pressure to reduce

debt and sold his stake

for `3,269 crore.

THE MINDTREE

SAGA

Profit:

`2,858

CRORE

Bought for:

`435.79

CRORE

Amount (post-tax)

to be used to pay

off debt:

`2,10 0 CRORE

Sold for:

`3,269

CRORE

Sold to:

L&T

Siddhartha’s stake in

Mindtree: 20.41%