Infosys co-founders are looking to sell their entire stake in the company, which could bring the curtains down on their long running spat with the company's new management, according to a report in The Times of India.
The co-founders-- NR Narayana Murthy, Nandan Nilekani, Kris Gopalakrishnan, S D Shibulal and K Dinesh--hold 12.75 percent stake in Infosys worth about Rs 28,000 crore, the report said.
Murthy, however, has denied any such move to the newspaper, while Nilekani offered no comments.
The stake sale is likely to executed through block deals in the stock market, the report said, adding they will be careful with the move as selling the stake in one shot is likely to impact the share price.
The move, if true, comes after the co-founders' long spat with management over various issues, including corporate governance. The first indication of their unhappiness came out when they abstained from voting on a resolution to give a two-year extension to CEO Vishal Sikka.
In February 2017, they wrote a letter to the board of the company questioning a slew of decisions taken by the management, including the severance package given to former chief financial officer Rajiv Bansal. They even objected to the $11 million remuneration for Sikka.
Only last week, Murthy had also expressed sadness over the likely layoffs at the company and suggested the senior executives should take a pay cut to accommodate more lower rung staff.
Given this context, there is also a possibility that this is likely to be a pressure tactics to force the management to fall in line.
However, if the sale news is true, a section of the company observers are likely to happy too.
The co-founders' intervention in the company affairs even though they hold no executive or non-executive roles has been seen as over-stepping their brief by many. A section of the observers have suggested that Murthy and others should now keep off the company and let the management function freely as the IT business model is under going a revolutionary change.
The stake sale, if it happens, is likely to be positive for the company as it will end needless distraction for the management. It will enable them to focus more on the strategy and business of the company.
However, as noted earlier, the co-founders will be careful with the stake sale as a sudden move will impact the stock price.
In December 2014, the co-founders and their family had sold 2.84 percent stake in Infosys for Rs 6,484 crore. The sale had brought down the stock price by 4.88 percent and the Sensex by 1.2 percent.
According to media reports, the shares were bought by 40-50 foreign and domestic institutional investors.
Published Date: Jun 09, 2017 09:14 am | Updated Date: Jun 09, 2017 09:14 am