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Aztec’s Story – From Rs. 80 to Rs. 80


In the second half of 2000, Bangalore was splashed with billboard advertisements about the next new thing, the software company anyone should want to work for. Aztec, it called itself, and the pedigree was impeccable.

Started, by J. Parthasarathy with funding from Exodus founder K.B. Chandrashekar (through e4e), the company became this hot-shot to-be-competition for the likes of Infy and TCS.

The IPO went through at Rs. 80 per share. It listed around Rs. 100, and soon collapsed with the .com bust. It hit lows of Rs. 13.35 in 2003, and rose with the general bull run to hit highs of 228 in 2006. Then it was all the way down to the current price of Rs. 74.

Aztec's Story - From Rs. 80 to Rs. 80

And now Mindtree acquires e4e’s stake in Aztec at Rs. 80 per share. Mindtree already has bought nearly 30% in the market. There will be an open offer for another 20%, and eventually a merger into Mindtree.

This is the culmination of a 7.5 year saga of Aztec. From Rs. 80, back to Rs. 80 – no splits, bonuses, and a total dividend of Rs. 2.1 added up in all these years. The company shuttled from profits to losses and back a number of times.

What does Mindtree get out of this? Software companies usually don’t have too many assets, but it could be the people. Looks like the management and employees are starting to sell their holdings – V. Chandrashekharan, the CEO and other key employees such as CIO, Director etc. have dramatically cut down their stake. Will they stay? If they don’t, will Mindtree be able to retain their client relationships? Only time will tell.

But it’s the age of consolidation for the next tier of IT service companies. To compete they need the size, so expect a lot more mergers.


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