Sikka rebuts reports of Infosys founders selling stake
10 June 2017
Infosys chief executive Vishal Sikka on Friday denied reports that the information technology major's founders led by Narayana Murthy and Nandan Nilekani were looking to sell their stakes.
''Murthy very categorically denied it and I think that we should leave it at that,'' Sikka told CNBC-TV18 in an interview. ''I have deep trust for them (founders) and respect them,'' he added.
The Times of India had cited ''people familiar with the development'' to report that the co-founders of Infosys were exploring a sale of their entire 12.75 per cent stake in the company worth about Rs28,000 crore.
The move was said to have been triggered by the promoters' unhappiness over the manner in which the company has been run since their exit three years ago.
Sikka said the Infosys board is working on the corporate governance issues raised by the founders. ''There has been a lot of communication (between board & founders),'' he said. An advisory panel ensures there is high bandwidth connection between board and founders for transformational work that Infosys is trying to do, he added.
In January, Murthy and other founders had raised had raised concerns over governance norms at the IT major and suggested bringing in value-based people into the firm. Severance packages given to former chief financial officer Rajiv Bansal and general counsel David Kennedy were also questioned.
The IT industry is undergoing a lot of churn lately due to global and domestic uncertainties, which is pushing companies to trim their workforce. Jobs are also being lost to automation.
Dismissing talk of reportedly planning to hire 10,000 Americans to cope with stricter H-1B visa norms, Sikka said there have been no layoffs in India. ''The rumours of 10,000 hires in US to replace Indians are also not true,'' he said. The company has been working on a plan to hire 10,000 executives since past one year, he added.
Infosys is ''hiring people'' and will continue to be a ''job creator'', Sikka asserted, adding that the US still presents a great opportunity for Infosys – ''the need is new tech, more local people''.
Earlier this week, there was a similar apparently misinformed report that the promoters of Infosys rival Wipro were seeking to sell their stake. This too was denied by Wipro chairman Azim Premji in a communication to staff. (See: Sell-out not on cards, Azim Premji assures Wipro staff)
Infosys hasn't shelved its 2020 revenue target, but the company may not be able to achieve $20 billion revenue in the next three years, Sikka said. The target put forward three years ago was aspirational and a way to get growth gears clicking, he added.
''We're clear that we will not sacrifice margins to get to the 2020 target,'' Sikka said.
Sikka also said there is nothing new in what Infosys chief operating officer Pravin Rao said on pricing pressures on the run-side of the business.
About 65 per cent of the workforce is working on 55 per cent of revenues, while 35 per cent of the workforce produces 45 per cent of revenues, Sikka said. The transformational part of business (build part) has tremendous opportunity, he added.