Nandan Nilekani – the former CEO and co-founder of Infosys – has rejoined as the Non-Executive Chairman of the board, effective immediately. Among the many duties that he will have is achieving a series of goals including hiring a new CEO. In his first reaction, Nandan Nilekani said that he is happy to return. Ahead of appointment of Nilekani, Infosys Chairman R Seshasayee, co-chair Ravi Venkatesan, Director Jeffrey S Lehman, recently-resigned CEO Sikka plus two other board members have also resigned.
Amid the ongoing conundrum at India’s second-largest information technology firm Infosys, we take a look at the performance of top line and shares under the leadership of Nandan Nilekani and Vishal Sikka.
Nandan Nilekani as CEO (2002-2007)*
Under the leadership of Nandan Nilekani, the shares of the Indian bellwether information technology company Infosys advanced over 350% (approx) since after he took over the post of CEO in March 2002 till the time he left in April 2007. And for the same fiscal term, the top line of the company had grown at a CAGR (compounded annual growth rate) of 38.25%.
Vishal Sikka as CEO (2014-2017)*
Under the leadership of recently-resigned Vishal Sikka, the shares of second-largest IT company Infosys gained just about 20% (approx) during the three year period from 2014, when the first non-founder CEO had joined the company, to August 2017, when he left. For the corresponding fiscal period, the top line of the firm has grown at a CAGR of 10.17%.
Following the development, Infosys’ ADR today rose 0.27% and 1.15% on NYSE (New York Stock Exchange) and NASDAQ (National Association of Securities Dealers Automated Quotations) respectively. On Thursday, the shares of Infosys partially recovered the losses and ended 2% higher at Rs 912.5 on BSE. Meanwhile today, Indian stock markets are closed on the account of Ganesh Chaturthi.
In welcoming Mr. Nilekani, the outgoing Chairman Mr. R. Seshasayee, who stepped down from the Board today, stated, “Nandan is the ideal leader for Infosys at this stage in the Company’s development. His appointment will allow Infosys to focus on the strategic changes it needs to make in order to capitalize on the attractive opportunities in the years ahead.
UB Pravin Rao will continue as interim CEO and MD at Infosys. Nilekani will consider broad-based shareholder consultation. The official statement released by Infosys said, “(The) Board of Directors has unanimously approved the appointment of Mr Nandan Nilekani as the Non-Executive Chairman of the Board, effective immediately.” Apart from the co founders themselves, a number of institutional investors in Infosys were asking Nilekani be appointed. Nilekani was first appointed CEO in 2002 and he stayed in that position till 2007.
*However, the comparison is not on a like to like basis – as first of all – Nandan Nilekani period accounts to five years while Vishal Sikka’s term was ended in just three years. Secondly, Nandan Nilekani’s headed the company during a boom time — the time when all the sectors flourished at an unimaginable pace — which was followed almost immediately by the global financial crisis of 2008.