Infosys after Vishal Sikka: Major developments so far
In less than a week after Vishal Sikka resigned as Infosys CEO and MD, India's second largest software company has become the talk of the town in IT industry. What triggered the talk was Vishal Sikka's letter that he addressed to Infosys employees, putting the blame -for his exit- squarely on founders, especially NR Narayana Murthy. What followed after Sikka's letter was Infosys board's six-page note that set the tone for another round of founder-management battle. The board in the letter said: "Mr Murthy's continuous assault, including his latest letter is the primary reason that the CEO, Dr. Vishal Sikka has resigned despite strong board support." NR Murthy was 'extremely anguished' by the Board's allegations and said: "I will reply to these allegations in the right manner and in the right forum and at the appropriate time." But, that is not all that has happened in past few days. Here are some other developments that have taken place:
INFOSYS LOST OVER RS 30,000 CRORE AFTER SIKKA'S RESIGNATION
The day Vishal Sikka resigned, Infosys lost over Rs 17000 crore from the market capitalisation. The Infosys stock which closed with a market capitalisation of around Rs 2,29,285 crore a day earlier, was down by up to 10 per cent, leading to a fall in its market capitalisation to Rs 2,12,262 crore. The free-falling of stock prices continued on second day of trading and lost over Rs 30,000 crores in just first two days of trading after Sikka's resignation.
INFOSYS OUT OF TOP TEN COMPANIES IN MARKET CAPITALIZATION
Due to continues fall in stock prices, Infosys has slipped out of the list of top 10 companies by market capitalisation on the Bombay Stock Exchange or BSE. Infosys was replaced by state-run Oil and Natural Gas Corporation or ONGC with the market capitalization of Rs 204433.44 crore. As on Tuesday, Infosys' market capitalisation was - at Rs 877.15 per share - Rs 201478.46 crore. Not only on BSE, the company also moved out of the list of ten most valued companies on the NSE. It was replaced by state-owned Indian Oil Corporation on NSE.
CALL FOR NANDAN NILEKANI AS INFOSYS CHAIRMAN GROWS
Amidst charges and counter-charges between Infosys founders and the board members, investor advisory firm Institutional Investor Advisory Services or IiAS favoured the company's co-founder and former UIDAI chairman Nandan Nilekani as its non-executive chairman. The advisory firm said that the Infosys board couldn't protect its CEO and to select a successor it must begin by reinventing itself. "It must convince Nandan Nilekani to join the board once again, as its Non-Executive Chairperson," IiAS said. Nilekani served the company as its CEO between March 2002 to April 2007. Citing a source, the CNBC-TV18 today reported that Nandan Nilekani was likely to return as the head of the company. "Clarity on Nilekani's role is expected in the next 48 hours," the report said.
TEPID RESPONSE TO INFOSYS' SHARE BUYBACK OFFER
Last week on Saturday, the Infosys Board had approved its first ever share buyback offer of Rs 13,000 crore. However, it couldn't lift the shareholders' confidence. On the first day of trading - after Sikka's exit - on Monday, Infosys suffered over 5 per cent drop in the value of its shares. The fall in stock prices was primarily due to uncertainty over the company's next CEO. The buyback offer failed to impress institutional investors, who own nearly 58 per cent of Infosys stock.
INFOSYS BOARD UNDER FIRE FOR NOTE AGAINST NR MURTHY
After Sikka's resignation, the Infosys put out a six-page strongly-worded note in which it blamed Murthy for running a campaign against the board and the company. It said: "Mr Murthy's campaign against the board and the company has had the unfortunate effect to undermine the company's efforts to transform itself." However, the Board's act did not go well with some of the institutional investors, proxy advisory firms and top executives who are now asking the board if they had so much confidence in Sikka they should have protected him. "It was pathetic. It was offensive and not befitting the board of a company like Infosys," the Live Mint quoted one of the founders who spoke on condition of anonymity.
NARAYANA MURTHY TO ADDRESS INFOSYS INVESTORS TODAY
Infosys founder NR Narayana Murthy who was scheduled to address Infy investors today at 6:30 has postponed the conference till August 29 . It will be his first interaction after Sikka's sudden departure. He may also take some questions from investors and assuage their concerns especially after the company has lost over Rs 30,000 crore in a matter of week.