1. $5 bn in kitty, Infosys CEO Vishal Sikka says, “We are not good in M&As”

$5 bn in kitty, Infosys CEO Vishal Sikka says, “We are not good in M&As”

Infosys, which has cash reserves of $5.2 billion in its kitty, will continue to look for acquisitions that fit into their strategic profile and also have an alignment of purpose with the founders of the company, company CEO Vishal Sikka said on Tuesday.

By: | Bengaluru | Published: February 15, 2017 4:31 AM
Infosys CEO Vishal Sikka Infosys CEO Vishal Sikka

Infosys, which has cash reserves of $5.2 billion in its kitty, will continue to look for acquisitions that fit into their strategic profile and also have an alignment of purpose with the founders of the company, company CEO Vishal Sikka said on Tuesday.

“We continue to look for candidates that fit with our strategic position and direction. Frankly, we are not good in M&A and have not bought that many companies. We continue to be very selective in finding companies that fit our strategic profile…where there is an alignment of purpose with the founders,” he said.

Infosys has been conservative with its M&A strategy with many of the buyouts being the smaller companies and taking minority investments in the new-age start-ups. The comments by the CEO come in light of questions raised on certain acquisitions made by Infosys in the recent past.

Sikka reiterated that Infosys will not buy companies with yesterday technologies, while adding that it is looking at a huge pipeline of candidates.

“M&A will be a key piece of our strategy, but we are not looking for multi-billion dollar acquisitions,” he said.

On the question of a proposed buyback by the company, the Infosys CEO said the key is to ensure that exercising cash will provide the most advantage to shareholders. The three main areas of their cash utilisation will be in the areas of infrastructure building, strategic growth initiatives and lastly M&A. “All the options are on the table.”

There has been a call from certain sections of the shareholders that the company should have right capital allocation strategy and Infosys does not require the huge amount of cash reserves, given the current business environment.

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