Bengaluru/MumbaiI: Shares of IT services major Infosys fell nearly 5 per cent today, wiping out Rs 11,611 crore from its market valuation, after its co-founders N R Narayana Murthy and Nandan Nilekani along with their family members, sold shares worth Rs 6,484 crore.
Families of four Infosys co-founders, including Narayana Murthy and Nandan Nilekani, today sold over USD 1 billion (Rs 6,484 crore) worth shares — within months of all original promoters exiting the management and Vishal Sikka becoming the first outsider CEO.
While these four co-founders, which also include former CEO S D Shibulal and K Dinesh, have monetised only part of their holdings — for entrepreneurship and philanthropic activities — their action led to a sharp plunge of about 5 per cent in the IT heavyweight’s share price eroding almost USD two billion from the company’s market capitalisation.
A total of 3.26 crore shares, accounting for over 5.5 per cent stake in the company, were sold through multiple deals by Murthy, Nilekani, Dinesh and some of their family members, as well as wife of Shibulal.
Infosys, which currently commands a market value of about Rs 2.25 lakh crore, was founded by seven engineers, including these four, by pooling together just USD 250 in 1981, while all the promoters together held 15.92 per cent stake at the end of last quarter.
The shares were sold to domestic and foreign institutional investors at an average price of Rs 1,988.87, as per Deutsche Equities India, which executed the deals.
The sale has been done to partially monetise their stake, after more than three decades of setting up the company. Some portion of the proceeds will also be used by the founders towards philanthropic activities.
The shares have been sold at a time when the company has gone through a major governance and management restructuring. The last of the Infosys founders stepped down from the board in October this year, while former SAP executive Vishal Sikka has taken over as the CEO. This is the first time that someone other than the co-founders has been appointed as CEO.
Infosys shares have been up 21.4 per cent since the beginning of the year, but slipped 4.88 per cent to close at Rs 1968.60 at the BSE today.
In a statement, Murthy said: “Our family has sold a minor part of our stake to continue various activities including our efforts to encourage entrepreneurship and our personal philanthropic efforts.”
“These are activities that I expect to be busy with during the next phase of my life. Even after this sale our family continues to be the largest shareholder among retail shareholders. We have tremendous confidence in the future of Infosys and its leaders,” said Murthy.
Murthy and family sold 1.2 crore shares for Rs 2386.55 crore and still is left with 2.34 crore shares. Nilekani and his wife Rohini sold 1.2 crore shares for Rs 2,386.23 crore and are left with 1.96 crore shares.
Dinesh and family sold 62 lakh shares for Rs 1,233.65 crore and still retains 2.25 crore shares. Shibulal’s wife Kumari sold 24 lakh shares for Rs 477.38 crore.
Infosys shares have so far risen 23 per cent since the company in June hired Vishal Sikka, the first chief executive officer that wasn’t one of the seven founders. That is more than double the gain in the benchmark index.