Yesterday, the BT Group sold its remaining 9.1% stake in
Tech Mahindra Limited for a little over Rs. 1000 crores, marking its complete
exit from the technology major. With this, the British company ended its two
decade association with its Indian joint venture partner Mahindra and
Mahindra.
The newspapers came flushed with comments that the
shareholding of BT Group was an overhang on Tech Mahindra’s stock, and the exit
was a positive development. I don’t know how correct that is since I was more interested
in finding out how much IRR did the BT Group make through its investment in
Tech Mahindra? An IRR of 29%, excluding the dividend income, indicate my
calculations.
The BT Group sold its 43% stake in four tranches – 10.5%
stake at the time of IPO in August 2006, 6.9% in November 2010, 14.1% in August
2012 and the remaining 9.1% in December 2012 – earning a handsome Rs. 3,150
crores on its Rs. 14 crore investment done in March 1990. (Write to me to get the excel sheet showing calculations for IRR).
Someone rightly said... patience pays big time!
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