Infosys loses Rs 34,000 crore in market-cap in two days

Infosys building in Mangalore
Infosys has lost  nearly Rs 34,000 crore in carket capitailisation (market-cap) in  the past two trading sessions after the resignation of Vishal Sikka from the post of Chief Executive Officer and Managing Director (CEO and MD).

At 03:30 pm; with a market-cap of Rs 200,640 crore on Monday, Infosys has lost Rs 33,915 crore market-cap in past two trading sessions, from Rs 234,555 crore on Thursday, August 17, 2017. The company has seen market-cap erosion of Rs 90,406 crore from its peak level of Rs 291,046 crore on July 6, 2016.

At the bourses, Infosys has dipped 14% in the past two trading sessions to Rs 874, its lowest level since August 8, 2014, after the IT major's buyback plan failed to cheer the markets. The company, on Saturday, had announced that it would buy back shares worth up to Rs 13,000 crore, or 4.92% of its paid-up capital, from investors at Rs 1,150 per share.

“Dr. Sikka's exit was the biggest risk and with this becoming an eventuality, the company faces a big challenge of filling the leadership vaccum. Dr. Sikka had guided the company well at a time when the industry is undergoing a metamorphosis towards newer technologies,” said analysts at Antique Stock Broking in a note.

We believe that leadership churn and the resultant growth slowdown will result in stock trading at the lower end of its historical range, said brokerage firm in company update report.

Analysts at HDFC Securities believe that Infosys’s 6.5-8.5% constant currency (CC) revenue growth guidance for FY18 (2-3.3% CQGR ask rate) is a tough ask now. The brokerage firm believes the discord between the Board and founders may impact senior management performance. This increases the risk of top-level attrition, especially recruits from SAP and other companies working out of Infosys’ US offices.

  Holding Mcap-lost
Categaory in % Rs crore
Promoters 12.75 4324
Foreign Institutional Investors 37.53 12728
Insurance Companies 11.01 3734
Indian Public 9.82 3330
Mutual  Funds / UTI 8.95 3035
Others 19.94 6763


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