Infosys Ltd denied a media report on Friday that the founders of India’s second-biggest software services exporter were looking to sell their entire 12.75% stake in the company.
“Infosys would like clarify reports in the media speculating on plans of stake sale by the promoters. This speculation has already been categorically denied by the promoters,” the IT major said in a statement.
The statement also appealed to the media against speculative stories.
Following the media report, Infosys shares took a hit falling as much as 3.5%, they were still down 1.7% at 1:15pm, on Wednesday.
Infosys founders’, led by Narayana Murthy, have publicly accused the company’s board of lapses in corporate governance, forcing the company to appoint a co-chairman to the board and a $2 billion payout to shareholders in the fiscal year to March 2018.
Murthy has also criticised pay hikes given to chief executive Vishal Sikka and operations chief Pravin Rao, and severance payouts given to executives, including former finance head Rajiv Bansal.
The row comes at a time when the Indian IT sector is facing headwinds in its biggest market, the United States, as President Donald Trump and his administration lean towards changing visa rules and hiking wages that could hit outsourcing firms.
Sikka has said that Infosys was likely to struggle to reach its ambitious $20 billion revenue target by 2020 due to a “challenging environment”.
Deven Choksey, promoter at KR Choksey Investment Managers, said markets would take any potential exit by promoters in stride, noting investors were more concerned about the broader outlook for India’s IT sector.
“The business situation for IT companies remains uncertain. That’s a larger concern than that of promoters trying to walk out of the company,” he said.
Infosys was founded in 1981 by seven engineers, including Murthy, who pooled $250, mostly borrowed from their wives. The company’s rapid growth kick-started outsourcing in India.