The resignation of Vishal Sikka from the post of CEO on Friday marked a dent in India’s second largest information technology company. Soon after the news broke out, pessimism spilled at a breakneck speed amid the market participants on the back of which the stock of Infosys tumbled over 13%. The market capitalisation of Infosys on Friday briefly slipped out of the top 10 companies on Bombay Stock Exchange but soon regained the spot after Infosys’ chairman R Seshasayee said that there will be no change to our buyback plan.
The chairman also added any of the things which are set in motion aren’t going to be stopped and the company has no interest in engaging in legal battle against founder Narayana Murthy. Shares of Infosys today fell as much as 9.6% to close at Rs 923.1 after it tumbled 13.42% to its 52-week low of at Rs 884.4 on BSE in the afternoon trade.
At the current prices of Rs 923.1, the market capitalisation of Infosys was at Rs 2,12,033.02 crore as compared to Rs 2,34,554.78 crore on Thursday at the closing price of Rs 1,021.15. But if today’s low price of Rs 884.4 was taken then market cap comes out at Rs 2,03,143.75 crore versus the market cap of ONGC which is at Rs 2,06,486.75 which stands on the tenth spot. On broader terms, Infosys today has lost about 22,521.76 crores from the total market value which is higher than the size of the share repurchase which is pegged to be at around Rs 16,000-17,000 crores.
Earlier today, Infosys board of directors has accepted Vishal Sikka’s resignation and appointed U.B. Pravin Rao as interim CEO and managing director. Vishal Sikka was the first non-founder CEO of the Bangalore-based information technology company. He joined Infosys in 2014. The company said Vishal Sikka was made the executive vice-chairman and will continue to stay in that capacity until a new permanent CEO and managing director takes charge by March 31.
Vishal Sikka in his notice to the board said, he was leaving because of “a continuous stream of distractions and disruptions” that were hindering management of the company. Vishal Sikka also blamed a continuous stream of “false, baseless, malicious and increasingly personal attacks” that were “amplified by the very people from whom we all expected the most steadfast support”.