Shares of Infosys took a nosedive on Friday, amid reports that the founders of the company were looking to sell off their stakes in the firm and wash their hands of the affair. Reportedly, the founders were being forced to resort to this decision due to a management that did not pay heed to their directives.
Immediately after media reports regarding the planned exits surfaced, both the founders as well as the Infosys management denied them vehemently, stating that no such exit plans were even being considered.
This helped curb the drop in the stock market until Infosys shares were more or less stable at a percent drop — as compared to a 3 percent drop before the statement. The stocks were trading around 1.5 rupees short of the INR 950 mark on Friday.
The news certainly comes at a pretty bad time. The company’s annual general meeting is to take place this month and rumors of the founders’ exit — particularly when it is the near iconic Narayana Murthy we are talking about — won’t do Infosys any favors.
The company is already under pressure due to rumors of projected job cuts in the IT sector. And it has also accepted that rumors of strained relations between the management and the founders have not been good for business. As such this news, which could well be just a rumor, has the potential to stir things up at the general meet, later in the month.
Speaking about the report, Infosys promoter NR Narayana Murthy told ET:
I have denied it and there is nothing more to add.