Infosys' First-Ever Buyback Fails To Lift Sentiment, Shares Slide 4%

Infosys' First-Ever Buyback Fails To Lift Sentiment, Shares Slide 4%

Infosys, India's second-largest software services company, lost almost '34,000 crore in market capitailisation (market-cap) and its stock slipped around 14.5% in the past two trading sessions after Vishal Sikka resigned as the chief executive officer and managing director last week.

During his tenure, Sikka has pushed the company towards innovation and veered away from being a mere service provider.

As finding closure to the "founder issues" and maintaining business traction, especially in large accounts, would not be easy, Dhasmana said that, over the long-term, the Board had to create mechanisms to shield the management from external noise as had been the case with Sikka.

Near-term direction will be dictated by last batch of Q1 results and commentary from AGMs of several companies, progress of monsoon, investment by FIIs and DIIs, the movement of rupee, crude oil prices and global cues.

On 18 August 2017, shortly after announcing CEO's resignation, the company had said that founder member, Narayana Murthy's continuous assault, including latest letter, is the primary reason that the CEO, Vishal Sikka, has resigned despite strong board support.

Murthy said such claims were "baseless", that he was "extremely anguished by the allegations, tone and tenor of the statements", and that he was not making a power play.

Miller added that "Murthy has much to answer for" as Infosys is now set for another period of uncertainty as it seeks a new leader. He stressed that he only wanted to maintain the company's governance standards.

U.B. Pravin Rao, Infosys' chief operating officer, was named interim managing director and CEO.

The public row at Infosys is reminiscent of Cyrus Mistry's unceremonious November ousting as boss of Tata Group over differences with the Tata family patriarch, Ratan Tata.

Founded in 1981, Infosys has built a large global presence with almost 200,000 employees, active in 45 different countries.

The ten most valued companies' list is based on the market capitalisation of Rs 2 trillion each.

According to I-Sec, high performers at Infosys identified more with Mr. Sikka in recent times rather than with Infosys as an institution, and may now look at avenues outside the company.

"Sikka was trying to change the way we do business", an Infosys engineer said, asking to remain anonymous.

The Indian IT Group goes ahead with its planned $2bn buyback, but at a 25% premium after shares are hit by its CEO's resignation.