Media reports are suggesting that British Telecom (BT) is likely to sell off its 31 per cent stake in Indian telecom services provider Tech Mahindra. The news was first posted by the Financial Times. If the report is to believed, the primary reason for the move is BT’s discomfort in the joint venture as it feels its stake in Tech Mahindra doesn’t fit well with the company’s long-term strategy.

Tech Mahindra has a market capital of about $2.2 billion and if BT truly sells off its 31 per cent stake, then it would be one of the largest deals in Indian outsourcing. There are several global players which would be interested in buying the stake, as most of these firms are struggling to deploy funds in India.

Mahindra & Mahindra Group owns a major 41 per cent stake in Tech Mahindra and with a desire to keep the company listed, it’s not very likely to bid for the stake.

But in an interview given to CNBC, Tech Mahindra President, International Operations, CP Gurnani said he was surprised to see the news on the web, as he had no idea about the possible stake sale. Gurnani further said that he sees no reason for BT to sell the stake as the venture is doing well.

He also said that BT's relationship with Tech Mahindra is extremely good. He added that the two companies recently signed a $350 million deal and one more deal has been announced which amounts to $700 billion. Prior to that there was a $1 billion deal.

There is no doubt that these deals were signed for multi-year projects, so only time will tell whether the report was just a rumour or really something wrong between BT and Tech Mahindra. X

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