CEO resignation sees billions wiped from Infosys market value
- 21 August, 2017 16:35
Outgoing Infosys CEO and MD, Dr. Vishal Sikka
Investors don’t appear to be happy about the shock resignation of former Infosys CEO and MD, Dr. Vishal Sikka, amid reports of ongoing disputes with the company’s founders.
Infosys is India’s second-largest IT services company, and has a global presence, including in Australia and New Zealand.
Sikka’s unexpected resignation, which followed a long-running feud with the company's founders, saw shares in the company slump 9.6 per cent on 18 August, wiping out US$3.45 billion off Infosys' market value.
Additionally, shares in the company fell as much as 4.6 per cent on 21 August, to a near three-year low, slumping for a second consecutive session, after brokerages including Nomura downgraded the stock following the resignation of its chief executive.
Nomura downgraded the stock to "reduce", saying the uncertainty over Infosys' management could hamper long-term growth, while expressing worries that the tussle between the founder and promoters could escalate.
The concerns about Infosys' future trumped the company's approval on Saturday of a 130 billion rupees (US$2.03 billion) share buyback.
As of 0421 GMT, Infosys shares were down 2.5 percent, hitting their lowest since September 2014.
(Reporting by Rafael Nam; Editing by Sherry Jacob-Phillips)