Infosys Infighting & Share Buyback

Here is what analysts say about Infosys shares.

Miller said the reasons given for Sikka’s resignation revolved mainly around “fifth-column sniper fire” at Sikka led from the sidelines by Murthy, prompted by perceived issues of governance and pay.

Infosys founder NR Narayana Murthy will hold a conference call with investors on Wednesday.

Last week, Vishal Sikka resigned as the CEO and managing director of Infosys, saying the assault on him by Murthy had become increasingly malicious and personal.

Mumbai: In the interest of good corporate governance, Infosys will have to initiate an external search process for a CEO soon, even if the company identifies internal candidates to replace Vishal Sikka, sources from the executive search firm industry said.

Narayana Murthy is all set to address Infosys shareholders tomorrow to explain his stand on the exit of Vishal Sikka, according to reports.

The resignation follows a year-long public spat where the founders have raised a slew of concerns, right from Sikka’s pay package to raising doubts over the company’s Dollars 200-million Panaya acquisition.

The letter blamed Murthy for Sikka’s exit. Infosys board had approved Rs 17.38 crore severance payment for Bansal.

The Infosys board got all the allegations probed by an independent panel, which gave it a clean chit. Here, too, the board complied by elevating Ravi Venkatesan. They have told me umpteen times that Dr Sikka is not a CEO material but CTO material.

Troubles only mounted for Infosys when an anonymous letter was sent to the market regulators in February this year, alleging that Panaya acquisition was overvalued and that some Infosys executives may have benefited from the deal. Nandan Nile kani’s net worth has slipped to below $750 million, from more than $800 million.

In absolute terms, the software service exporter has lost Rs 33,914.71 crore of its market capitalisation as of Monday’s closing, after sell-off was triggered Friday morning. Investors lost almost Rs 10,000 crore in market capitalisation during the same day.

The shares fell 5.37% on Monday to close at Rs 873.50 on the BSE. He also said that he was disappointed by the lack of support from the people he had expected would back him.

A senior official at state-run Life Insurance Corp (LIC), which owns a seven per cent stake in Infosys, said they were closely monitoring the situation at the company and were looking to meet with the management before deciding to participate in the buyback. The attractive share buyback at Rs 1,150 apiece announced on Saturday could not stem the free fall as many brokerages have downgraded the stock, factoring in tough times ahead. Sometimes it had been related to remuneration, sometimes it was related to recruitment and sometimes it was about decisions taken by the company.