Shares of Infosys ended sharply lower by nearly 10 percent on Friday, wiping out Rs 22,519 crore from its market valuation, after Vishal Sikka, the first non- founder CEO of the company, called it quits.
The stock slumped 9.60 percent to settle at Rs 923.10 on BSE. During the day, it dived 13.39 percent to Rs 884.40 – its 52-week low level.
At NSE, shares of the company plummeted 9.56 percent to end at Rs 923.25.
The stock was the worst performer among the bluechips on both the key indices during the day. The steep fall in the stock was also instrumental in sending the 30-share benchmark index down by 270.78 points at 31,524.68.
Led by the sharp plunge, the company’s market valuation slumped Rs 22,518.98 crore to Rs 2,12,033.02 crore.
“The resignation of Sikka triggered by the continuous stream of distractions and disruptions over the recent months and quarters is very unfortunate. The market has signalled its displeasure with the stock tanking,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Sikka abruptly resigned due to the “continuous assault” and “campaign” by founder and ex-chairman NR Narayana Murthy, the USD 10 billion firm said today.
Sikka, 50, a former German IT major SAP executive under whose three-year tenure Infosys’ revenue rose about 25 percent, did not name Murthy directly as the reason for his exit but said he faced “false, baseless, malicious and increasingly personal attacks”.
While Pravin Rao, currently chief operating officer, has been named the interim CEO, Sikka will become executive vice- chairman for USD 1 annual salary to help find new MD and CEO latest by March 31, 2018.
Meanwhile, according to mutual fund research firm Morningstar, the market value of mutual fund holdings in Infosys stood at Rs 21,094 crore in July compared with Rs 16,376 crore in the same month last year.
“Infosys has been the favoured stock from the tech space, with 40 percent of the mutual fund industry’s overall technology sector allocations being made in the IT major,” said Kaustubh Belapurkar, Director Fund Research, Morningstar.