Infosys shares drop 3%: Why is Narayana Murthy's firm struggling on the stock market?
Infosys has mostly gone steady on the stock market but is seemingly struggling after its the termination of a recent mega-deal.
While Narayana Murthy's firm Infosys delivered one of the most stellar performances on the Indian stock market in the past, its shares fell nearly three percent on Tuesday, when the markets reopened after a three-day gap.
On December 26, Infosys shares dipped by 2.7 percent, building pressure on the company over the recent changes in top posts. This drop also comes after Infosys terminated a mega-deal linked with a global artificial intelligence firm.
Infosys shares were recorded at ₹1,546 when the markets closed on Tuesday, 2.7 percent lower than the previous day. In the trading session before that, the Murthy's firm has shown a growth of nearly 2 percent, closing at ₹1,561. In the early trading hours of December, the stock price was ₹1,523.
Why is Infosys struggling on the stock market?
One of the most major developments in Infosys is the recent change of its chief financial officer, a move which came as a surprise to the shareholders. Infosys CFO Nilanjan Roy had resigned on December 11, saying he wanted to pursue his "personal aspirations."
Nilanjan Roy's exit caused a wave of uncertainty in the company, leading to disturbances in the stock market. Roy's last working day at Infosys will be March 31, 2024, and he will be succeeded by Jayesh Sanghrajka, the deputy CFO of the company.
Less than two weeks after Roy handed in his resignation from the company, Infosys and an unnamed global firm terminated their massive artificial intelligence deal, which was worth over $1.5 billion.
Infosys and the firm had signed a Memorandum of Understanding (MoU) for a potential deal focusing on AI solutions. Infosys said it had plans to enhance digital experiences and provide business operation services, utilizing the company's platforms and artificial intelligence (AI) solutions, reported Reuters.
However, the deal fell through shortly after Nilanjan Roy's resignation, further leading to the sudden drop in share prices of Infosys. Despite the 2.7 percent drop yesterday, Infosys shares have been displaying a good performance over the last quarter, rising by nearly 7 percent.