IT major Infosys on Tuesday crashed 16 per cent following allegations of “unethical practices” against the company’s top officials, pulling down the BSE Sensex 334.54 points, or 0.85 per cent, at 38,963.84.
The tech blue chip closed 16.21 per cent lower at Rs 643.30 on the BSE, wiping out over Rs 50,000 crore (US $ 7 billion) from the company’s market valuation at Rs 2.76 lakh crore. The company’s shares tanked nearly 17 per cent in their worst intraday fall in over six years during the day after the company said it is investigating claims by anonymous whistleblowers about irregular accounting. It hit an intra-day low of 38,924.85 and a high of 39,426.47.
Mutual funds which hold 13 per cent stake in Infosys and foreign portfolio investors (FPIs) who account for 33.45 per cent stake were big losers in the Infosys crash. The market value of their holdings has fallen by nearly Rs 23,250 crore. Promoters who hold 13.15 per cent stake have seen a fall of Rs 6,575 crore in the value of their holdings.
Stock not out of the woods yet
Infosys’ shares tanked about 16 per cent in their worst intra-day fall in over six years during the day, after the company said it is investigating claims by anonymous whistleblowers about irregular accounting. However, the stock is likely to remain under pressure until the audit committee clears the management of any wrongdoing.
An anonymous group of the IT major’s employees accused CEO Salil Parekh and CFO Nilanjan Roy of indulging in “unethical practices”. The firm confirmed having received the complaint and said that the same had been placed before the audit committee as per the company’s policies.
Sectorally, BSE IT and teck suffered a major blow due to Infosys crisis — losing as much as 7 per cent. “IT index was the top loser (down 7 per cent) as IT major Infosys was accused of unethical business practices by a whistle-blower group,” said Ajit Mishra Vice President, Research, Religare Broking.
The broader NSE Nifty too tumbled 73.50 points, or 0.63 per cent, to settle at 11,588.35. Telecom, metal and auto were among the other sectoral losers. On the other hand, BSE healthcare, consumer durables, bankex, finance, oil and gas, FMCG and realty indices rose up to 1.56 per cent.