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BW Businessworld

Infosys Surges On Murthy's Return As Chairman

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Shares of Infosys Ltd rose around 4 per cent on Monday (3 June) on bets the return of founder and former chairman N.R. Narayana Murthy as executive chairman would improve the IT services outlook. The return of Murthy, which was announced on Saturday, comes after Infosys has grappled with disappointing results and loss of market share.
 
Just two years after he stepped down from a leadership role at Infosys Ltd, a company he co-founded with six others, one of Indian IT’s tech titans N.R. Narayana Murthy is returning as the executive Chairman of the company. K.V. Kamath who was the chairman of Infosys has stepped down and is set to become an independent director on the board. Interestingly, Murthy’s son Rohan will be his executive assistant. In the past, Infosys founders had deliberately chosen not to involve their children in company affairs.
 
Infosys once seen as the trend setter for the Indian IT services industry has been struggling to grow in the last few years even as its peers like Tata Consultancy Services Ltd, Cognizant and HCL Technologies have grown at a faster pace. Murthy’s return to an executive role in the company is likely to help lift staff morale and also give a boost to the company’s stock price on Monday when the bourses open.
 
Kris Gopalkrishnan who was the co-Chairman of Infosys has been redesignated as executive Vice-Chairman of the board. Company said S D Shibulal will continue to be the CEO and MD. Sources indicated that Murthy has returned to turn around the fortunes of the company which was floundering. 
 
 
“He enjoyed his time playing with Krishna (his granddaughter) but wanted to ensure that Infosys wasn’t left behind. While this announcement might have come as a surprise to others, he has been closely involved in the business developments of the company over the last couple of months. In a sense his hand has been forced because of the poor performance of the company. I wouldn’t be surprised if there are more changes in the near future including revisiting the company’s 3.0 strategy which has not been very successful,” said an senior official of the company who did not want to be quoted as he is not authorised to speak to the media.
 
Murthy has requested for just a token compensation of Rs 1 per year. “This is not about the money but about legacy. He wants Infosys to regain its old lustre,” the official added. Internationally too there have been examples of tech titans coming back from their retirements to rescue the companies they founded. The latest example being Michael Dell who came back from retirement in 2007 and is now looking to take the company private.  
 
(With inputs from agencies)