Infosys Shares Jump On Nandan Nilekani's Return As Chairman
Shares of India's Infosys Ltd surged almost 5 percent on Monday (28 August), their first day of trading since co-founder Nandan Nilekani returned to the company as chairman, on hopes a months-long row between the board and the founders would be resolved.
Nilekani, also a former Infosys CEO, was named chairman on Thursday (24 August) in a victory for the founders, who led by Narayana Murthy have waged an acrimonious battle with the board for months over alleged corporate governance lapses.
Analysts said Nilekani's return would provide some much needed stability to India's No.2 IT services exporter that has been reeling since Vishal Sikka resigned as its CEO on 18 August, blaming Murthy for creating an "untenable atmosphere".
The new chairman of Infosys told investors on Friday (25 August) his priorities were to find a CEO, reconstitute the board and shape future strategy.
Shares of the firm were trading up more than 3 percent as of 0518 GMT, after earlier climbing to Rs 953.95. Indian markets were closed on Friday (25 August) for a public holiday.
Nilekani's "return to Infosys gives it the best start in six years in regaining leadership stability, strategic relevance and resolving cultural battles", CLSA wrote in a note to clients.
The brokerage raised its rating on Infosys to "buy" from underperform".
Another brokerage Jefferies said the appointment would likely lay to rest any issues with founders, helping client and employee retention at the firm.
Nilekani, who served as Infosys' CEO during 2002-2007, is credited for increasing the firm's annual revenue to $2 billion from $500 million over the period.
Infosys shares had slumped to a more than three-year low last Monday (21 August) following Sikka's resignation, but have recouped some losses since on expectations of Nilekani's return.
($1 = 63.8900 Indian rupees)
(Reuters)
