Mumbai: Infosys' scrip on Monday soared by 9 percent in morning trade as the IT major recalled its founder N R Narayana Murthy and returned control of the company. After making a strong opening, shares of Infosys further jumped 9 percent to Rs 2,624.90 on the BSE. Industry hails return of N R Narayana Murthy The resilient Indian IT industry hailed the return of its icon N R Narayana Murthy as executive chairman of global software major Infosys Ltd on Saturday. (Agencies)
At the NSE, the stock shot-up by 8.84 percent to Rs 2,625. The bellwether scrip was the top gainer on both Sensex and Nifty during the morning trade. Later, the scrip pared some of the gains and was trading at Rs 2,508.40, up 4.19 percent in late morning trade.
"The move is aimed to strengthen the leadership and put the company back on high growth path. We believe the move is positive for the company," said Ankita Somani, Research Analyst– IT, Angel Broking.
Struggling IT major Infosys had on Saturday recalled its founder N R Narayana Murthy and returned control of the company. The performance has disappointed investors due to poor earnings in the last nine quarters and losing ground to smaller rivals.
Murthy, who had shed executive role seven years ago and finally retired as head of Infosys in August 2011, has been appointed Executive Chairman, replacing K V Kamath during whose tenure the company shares slumped 15 percent.
Billionaire Murthy accepted a five-year term, over which period he will earn a salary of one-rupee per year and will have his son, Rohan, as his executive assistant.
"Murthy is an iconic leader who played a key role to shape the Indian IT industry. We welcome him in his role as executive chairman of Infosys," Nasscom president Som Mittal said in a statement.
Noting that Murthy's guidance and strategic insights to his company and the industry would be valuable, Mittal said that Nasscom would look forward to work more closely with the former to address the industry challenges and build new opportunities on its next phase of evolution and growth.
"Murthy recently chaired the Nasscom 2020 organizational and governance committee where his leadership, commitment, inclusive and collaborative approach helped to define our strategic approach," Mittal asserted.
As the industry's representative trade body, the National Association of Software and Services Companies (Nasscom) promotes the development of the export-oriented sector and the business process outsourcing (BPO) operations of the member firms.
Echoing Mittal, Nasscom chairman and Zenzar Technologies chief executive Ganesh Natarajan said Murthy's return would be healthy for Infosys as he could build a new leadership vision in the company.
"I expect Murthy to delineate executive and non-executive roles. The company's valuation is based on maintaining both margins and volume," Natarajan said.
Manipal Global Education chairman and former Infosys director TV Mohandas Pai said employees and investors would be happy with Murthy's return, as the global firm needed a very strong leader at this point of time.
"Infosys is not a family dominated company. Inclusion of Murthy's son (Rohan Murthy) as an executive assistant to the chairman is only incidental," Pai said.
Pai quit Infosys in April 2011 ahead of Murthy's retirement as chairman in August 2011. India's leading biotechnology firm Biocon chairperson Kiran Mazumdar Shaw termed Murthy's return to Infosys as a welcome development.
"Murthy's return augurs well for the company, which needs a hands-on leadership to manage its global operations," Shaw observed.
Infosys's rival in the tech hub Wipro Ltd said Murthy was an industry icon with a track record. "We wish Murthy and Infosys the very best," a Wipro official said on anonymity.
On the other hand, MindTree, a leading Bangalore-based IT consulting and software services firm said the biggest challenge for Infosys was to get growth momentum back.
"We have to wait and watch how the changes in the leadership role shape up Infosys," a company spokesman said.
Mumbai: Infosys' scrip on Monday soared by 9 percent in morning trade as the IT major recalled its founder N R Narayana Murthy and returned control of the company. After making a strong opening, shares of Infosys further jumped 9 percent to Rs 2,624.90 on the BSE.
Industry hails return of N R Narayana Murthy
The resilient Indian IT industry hailed the return of its icon N R Narayana Murthy as executive chairman of global software major Infosys Ltd on Saturday.