After the ouster of Vishal Sikka from Infosys, media reports suggest that Nandan Nilekani could be finalized as the new CEO of the company in the next 48 hours. Though there is no clarity on the role and the form of his return to the company as of now, as a response to his likely appointment, Infosys shares have jumped.
Previously, Sikka’s resignation letter, which talked about the increasing negativity in the organization, had sent shockwaves across the industry.
He said, "This continuous drumbeat of distractions and negativity over the last several months/quarters, inhibits our ability to make positive change and stay focused on value creation. Addressing the noise by itself is damaging; hundreds of hours of my own time has gone into this recently. But the structural challenges this engenders within the organization has a very damaging effect on our ability to carry out any kind of a transformation, especially one that is as fundamental as transforming from a cost-oriented to an innovation oriented value delivery to clients.”
After his resignation, Infosys shares had dropped 7.6 percent. He was the first non-founder to serve as the CEO of Infosys.
Media reports also suggest that Narayan Murthy had severely criticized Sikka and told the board that he, Sikka, would make a good CTO but not a CEO of the organization. The board also alleged that Murthy’s criticism of Sikka was the primary reason for the latter’s resignation, and this is despite the support that he enjoyed from the board.
When Dr Vishal Sikka came onboard, Infosys’s market capitalization was INR 1,68,768 crores, and a day before he resigned the numbers were INR 2,34,549 crores, which is a rise of 38.98%. Though, market capitalization, is not a comprehensive indicator of growth, this does hint at the reasons for the board’s continuous support for Sikka.
When the conflict between the board and the founder and former CEO of Infosys, Narayan Murthy came to light, Nandan Nilekani supported the co-founder. His return could, as many media reports suggest, bridge the gap between the board and founders of the company.
Nandan Nilekani’s return would also mark the return of a founder as the CEO of the company if he does take up that position. He previously served in the position from the year 2002 to 2007. The former Infosys Chief Financial Officer, V Balakrishnan in an interview supports his return to the company.
Update: Recent media reports suggest that Nilekani is most likely to return in the role of non-executive chairperson of the Infosys board. The clarity about his role will come to light in the next 48 hours. Domestic institutional investors have written to the board suggesting that he take over as the chairperson.