Infosys: The father-son effect
Sunny Sen June 4, 2013Just three minutes after the morning bell signaling the start of trading rang in stock market on Monday, June 3, Infosys's share price hit the day's high of Rs 2,600, up by almost eight per cent from the closing price of Friday of the previous week. With the return of its iconic founder, N.R. Narayana Murthy , as Executive Chairman of the Infosys Board, suddenly, the world around Infosys seemed happier.
For years Infosys, the $7 billion IT behemoth had this reputation of being Indian IT's bellwether. But about a year back, TCS seemed to take away the title from it. Infosys has been underperforming for a couple of years, and has at times even missed or corrected its guidance. There is a general impression that Murthy has the Midas' touch, and his return will get the company back on the high growth path.
However, a day before the announcement of Murthy's return, a controversy arose. The Infosys stock went up by 3.32 per cent, though on that day, the Sensex fell. Some news reports wondered if this was a case of "insider trading" - key people had known in advance Murthy was coming back. For a person like Murthy, who has a reputation for professional rectitude, this may not have been the best way to start a second innings.
Infosys denied all allegations of insider trading. "We are a company that prides itself on adhering to the highest levels of corporate governance at all times. These are baseless speculations and we cannot comment on them," it said.
The markets seem unperturbed by the entry of Murthy's son, Rohan Murty, (who spells his second name the way his mother Sudha Murty does) into Infosys. He has joined the company as his father's Executive Assistant, to be a part of the team that will be formed to assist the Chairman's office to bring the company back on track.
Murty, clad in a casual white shirt and chinos during his on-stage presentation at the India Today Conclave only a few months back, had given no indication that he could join Infosys so soon. He even stated at the Conclave that along with his team he was working on technologies that would help in the efficient use of spectrum, the rare resource that transfers voice and data through mobile devices over air waves.
Will all of that be abandoned? Maybe, maybe not. For now, the younger Murty's attention will be consumed in getting Infosys back on track. Why not? Even Catamaran, Narayana Murthy's venture-capital firm, set up after he ceased to play an executive role in Infosys, will have to do without him for sometime now. That may not be bad news if Infosys gets firmly back on the comeback trail soon.