Infosys remained among the top losers on BSE today despite founder NR Narayana Murthy dismissing reports that the promoters of the company were planning to sell their stake.
Infosys shares were down 1.66 per cent to Rs 940.40 at 12:15 pm, after earlier falling as much as 3.5 per cent to the day's lowest at Rs 923.05 in the morning trade.
Share prices of Infosys nosedived after a Times of India report alleged that founders NR Narayana Murthy , Nandan Nilekani, Kris Gopalakrishnan , SD Shibulal and K DInesh were going to sell their 12.75 per cent stakes in the company and wash their hands off for good.
The report attributed the alleged walkout of Infosys promoters to their dissatisfaction with the way incumbent CEO Vishal Sikka runs the company. However, it said nothing about two other founders - Ashok Arora and NS Raghavan, and Infosys soon went into crisis control mode to cut losses.
"We would like to clarify reports in media speculating on plans of stake sale by the promoters. This speculation has already been denied categorically by the promoters," the company said in a statement.
Infosys founders', led by Murthy, have publicly accused the company's board of lapses in corporate governance, forcing the company to appoint a co-chairman to the board and a $2 billion payout to shareholders in the fiscal year to March 2018. Murthy has also criticised pay hikes given to Sikka and operations chief Pravin Rao, and severance payouts given to executives, including former finance head Rajiv Bansal.
The row comes at a time when the Indian IT sector is facing headwinds in its biggest market, the United States, as President Donald Trump and his administration lean towards changing visa rules and hiking wages that could hit outsourcing firms.
Deven Choksey, promoter at KR Choksey Investment Managers, said markets would take any potential exit by promoters in stride, noting investors were more concerned about the broader outlook for India's IT sector.
"The business situation for IT companies remains uncertain. That's a larger concern than that of promoters trying to walk out of the company," he was quoted by Reuters.
Infosys was founded in 1981 by seven engineers, including Murthy, who pooled $250, mostly borrowed from their wives. It was the company's rapid growth kick-started outsourcing in India.
Meanwhile, the BSE Information and Technology index suffered from the poor performance of Infosys shares. The index remained a sorry affair owing to decline in shares prices of Infosys and Tech Mahindra.