New Delhi: Vishal Sikka’s shock exit from Infosys has wiped out Rs 16,000 crore from the IT major’s market capitalisation in one hour, in an indication that the markets are frantically down rating the stock.
Infosys shares fell over 7%, or by Rs 71 before rebounding somewhat at 10.20 am on Friday on the Bombay Stock Exchange. The shares were trading at Rs 953 apiece. The company’s m-cap (shares multiplied by price) was Rs 2.1 lakh crore on June 30 as per company documents. This means that 7% of the company’s market cap was eroded in under an hour of trading.
The company sent a statement to the Bombay Stock Exchange at 9.09 am announcing the dramatic news, before the market opening at 9.15 am.
The stock briefly climbed from Rs 977.3 to Rs 985.9 at 9.17 am. This is the point at which the market fully digested the news of turbulence at India’s second biggest IT firm, and the rout began. The stock tumbled to a low of Rs 944, as investors frantically shorted the stock, before rebounding somewhat.
Chief Operating Officer UB Pravin Rao has been made the interim CEO, while Sikka has been made the Executive Vice-Chairman.
In his resignation letter, Sikka cited “continuous distractions and disruptions", as the reason for his resignation.
In a letter to Infosys employees, Sikka referred to “increasingly personal attacks against him”. “I cannot carry out my job as CEO and continue to create value, while also constantly defending against unrelenting, baseless/malicious and increasingly personal attacks,” Sikka said in the letter which he later shared on his blog.
“I now need to move forward, and return to an environment of respect, trust and empowerment, where I can take on new lofty challenges, as can each of you,” he added.