HCL Technologies heads for a change in management

HCL Technologies is heading for a change in management, with Anant Gupta most likely to get a bigger role in the organisation, after its CEO Vineet Nayar sold his entire stake in the company on 7 April 2012.

At present, Anant Gupta is the president of HCL Technologies' 'infrastructure services division'.

''We believe there could be a change in management responsibilities at HCL Technologies in the near future. The change could be announced as early as July / August when the company announces its full-year results,'' Morgan Stanley said, adding it expects Gupta to take up a bigger role in the organisation.

According to Morgan Stanley, Nayar may not be as active in reviewing business plans for the coming year as he has been in the past. Nayar had sold 2.7 million equity shares of Rs2 each, or 0.39 per cent stake in the information technology services provider for Rs133 crore on 7 June. As of now, Nayar does not have any shareholding in the
company.

''In our view, there could be a few ways of managing potential transition. One, Gupta takes over as the chief operating officer and Nayar stays as the chief executive officer – transitioning Gupta to the CEO position in the due course. Second, Nayar leaves the CEO position for Gupta and takes on an advisory role,'' it said.

''It is not clear to us how or when the transition will be effected,'' it added.

''A CEO periodically selling a part of his stake in the company is not uncommon. That said, Nayar selling his stake is surprising," JP Morgan said.

''Managing a possible transition will be critical for HCL Technologies' continued strong performance. Though TCS managed the transition seamlessly, Infosys recently indicated that a change in management led to muted revenue growth performance and diverted management bandwidth more than anticipated,'' Morgan Stanley said.