Infosys tumbled 6.98% to Rs 949.90 at 10:25 IST on BSE after the company said that its board of directors today, 18 August 2017, accepted the resignation of Dr Vishal Sikka as the Managing Director and Chief Executive Officer of the company.
The announcement was made during market hours today, 18 August 2017.Meanwhile, the S&P BSE Sensex was down 242.26 points or 0.76% at 31,553.20.
High volumes were witnessed on the counter. On the BSE, 14.29 lakh shares were traded on the counter so far as against the average daily volumes of 2.81 lakh shares in the past one quarter. The stock had hit a high of Rs 1,021.50 and a low of Rs 944 so far during the day. The stock had hit a 52-week low of Rs 900.30 on 9 November 2016. The stock had hit a 52-week high of Rs 1,080.70 on 14 October 2016.
The stock had outperformed the market over the past one month till 17 August 2017, rising 3.63% compared with the Sensex's 0.87% decline. The stock had also outperformed the market over the past one quarter, gaining 7.24% as against the Sensex's 3.71% rise. The scrip had, however, underperformed the market over the past one year, falling 1.19% as against the Sensex's 13.53% rise.
The large-cap company has equity capital of Rs 1148.48 crore. Face value per share is Rs 5.
Infosys said that board of directors of the company at a meeting held today, 18 August 2017, accepted the resignation of Dr Vishal Sikka as the Managing Director and Chief Executive Officer of the company with immediate effect. The board appointed Dr Vishal Sikka as the Executive Vice-Chairman.
The board appointed U B Pravin Rao as the Interim-Managing Director and Chief Executive Officer. The succession plan for appointment of a new Managing Director and Chief Executive Officer has been operationalised by the board and a search for the same has been commenced, company said.
In his notice of resignation to the board, Dr Sikka reiterated his belief in the great potential of Infosys, but cited among his reasons for leaving a continuous stream of distractions and disruptions over the recent months and quarters, increasingly personal and negative as of late, as preventing management's ability to accelerate the company's transformation.
The company said board understands and acknowledges Dr Sikka's reasons for resignation, and regrets his decision. In particular, the board is profoundly distressed by the unfounded personal attacks on the members of our management team that were made in the anonymous letters and have surfaced in recent months.
As the board has previously stated, a series of careful investigations found no merit to the unsubstantiated and anonymous allegations that had been asserted. The board denounces the critics who have amplified and sought to further promote demonstrably false allegations which have harmed employee morale and contributed to the loss of the company's valued CEO.
Dr Sikka has been appointed Executive Vice Chairman effective today, 18 August 2017 and will hold office until the new permanent Chief Executive Officer and Managing Director takes charge, which should be no later than 31 March 2018.
Dr Sikka will continue to focus on strategic initiatives, key customer relationships and technology development. He will report to the company's board.
Dr Sikka will receive an annual salary of $1 during his tenure as Executive Vice Chairman. Any company equity awards held by Dr Sikka that remain outstanding and unvested shall, during his term as Executive Vice Chairman, remain outstanding and shall continue to vest (and, in the case of stock options, become exercisable) in accordance with their terms.
The board has mandated the Chairman and the Nomination and Remuneration Committee to expeditiously identify and select a permanent CEO and Managing Director.
Separately, Infosys announced that ATP, the governing body of men's professional tennis, in association with company launched a new 'PlayerZone' app and website. The revamped PlayerZone, an extranet portal for ATP players, their support teams, coaches, and others in the ecosystem, allows users to engage with each other and access information across a wide range of operational aspects related to life on Tour. The announcement was made after market hours yesterday, 17 August 2017.
The PlayerZone is developed with best-in-class technology to be intuitive and more convenient, offering biometric login on the app. It also provides information on tournament entries and withdrawals, automated updates on match scheduling and results, rules and regulations, all the way to hotel information, transportation, visa requirements, and more. Besides simplifying the life of players on Tour, PlayerZone will also feature new prize money and taxes data to ease tracking of earnings and facilitate compliance.
The new app will increase engagement with the next generation of players, provide a central portal of information as players' progress through different stages of their career, as well as offer a forum to engagewith the players' support teams in a private and secure digital environment.
Infosys' consolidated net profit fell 3.3% to Rs 3483 crore on 0.2% decline in revenue to Rs 17078 crore in Q1 June 2017 over Q4 March 2017.
Infosys is a global leader in technology services and consulting.
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