Infosys share price recovered some lost ground in early trade today on value buying a day after the stock plunged to its six-year low as the IT firm faced allegations of indulging in 'unethical' practices to generate more profit and revenue from an anonymous employee group, named 'Ethical Employees'. Infosys share price rose 1.57% to Rs 653.40 compared to the previous close of Rs 643.30 on BSE today. Infosys share has gained after three days of consecutive fall.
However, the large cap stock was trading lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. Market capitalisation of the stock rose to Rs 2,80,036 crore in trade today compared to the previous close of Rs 2,76,300 crore.
On Monday, Infosys share price fell 16.21% or 124 points lower at Rs 643.30 compared to the previous close of Rs 767.75 on BSE. On Nifty, the stock of the IT major crashed 16.65% lower to Rs 640 against the previous close of Rs 767.85.
Infosys investors lost Rs 50,639 crore in market wealth on Monday with the stock's market capitalisation sinking to Rs 2,76,300 crore on BSE compared to Friday's close of Rs 3,26,939 crore. It was the top loser on both Sensex and Nifty.
In a complaint letter to the board of Infosys and the US Securities and Exchange Commission (SEC) on July 20, the group has claimed that the company asked them not to "fully recognise costs like visa costs" in last quarter to earn more profit. It added that when the auditor pointed it out, the issue was postponed by the company.
The group said they were prevented from sharing data on large deals and important financial measures during board meetings. "CEO and CFO are asking us to show more profits in treasury by taking up risks and make a change to policies. This will provide short-term profits," the group alleged.
Meanwhile, Infosys in a statement said it's investigating the charges. "The whistleblower complaint has been placed before the Audit Committee as per the company's practice and will be dealt with in accordance with the company's whistleblowers' policy," the IT firm said.
The slump in Infosys share price on Monday was similar to the fall more than two years ago when CEO and MD Vishal Sikka resigned leading to a loss of Rs 10,000 crore in market wealth in a single session. On August 18, 2017, Vishal Sikka put in his papers citing distractions and disruptions as reasons for his resignation. The stock fell 13% intra day with investors losing Rs 17,000 crore that day. The stock closed 9.60 percent or 98.05 points lower at 923.10 that day.