Amidst continued friction between the board and the promoter founder, Infosys CEO and MD Vishal Sikka has decided to call quit at India’s second largest IT company.
The impact of the recent criticism of the company on Sikka was obvious in his resignation letter, assessed by DH. “Allegations that have been repeatedly proven false and baseless by multiple, independent investigations. But despite this, the attacks continue, and worse still, amplified by the very people from whom we all expected the most steadfast support in this great transformation. 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,” Sikka said in his letter.
Joining from German multinational software corporation, Sikka took over as Infosys CEO and MD from SD Shibulal, one of the company's founders. A doctorate holder from Stanford University, Sikka set in motion the Vision 2020 for the company, with a focus on automation. If company management is to be believed, Sikka's successors will be continuing the work on Vision 2020, and there will be a smooth transition on that front.
When Sikka took over as the CEO, the then Executive Chairman, N R Narayana Murthy had said that “I am pleased with the selection of Vishal Sikka as our new CEO.”
He had also added, “Vishal brings valuable experience as a leader of a large, global corporation. His illustrious track record and value system make him an ideal choice to lead Infosys.”
Sikka, on his part, on Friday said that he joined Infosys after assurances from Murthy himself, about giving him the freedom to work.
When Vishal Sikka took over as CEO, in the quarter preceding it, ended June 30, 2014, the company’s quarterly revenues stood at Rs 12,770 crore. In the last quarter ended June 30, 2017, the company had clocked revenues of Rs 17,078, seeing a jump of over Rs 4,000 crore under a leadership of Sikka.
Realising the slow growth rate of the businesses, Sikka throughout his three years at the IT giant focused on increasing revenue from the non-conventional avenues. The Infosys also saw an acquisition spree under Sikka. In 2015, Infosys acquired Panaya, the provider of automation technology for large scale enterprise software management. The deal is still embroiled in controversy, despite the independent auditors giving a clean chit on it. In 2015 company acquired two more companies - Noah Consulting, a provider of advanced information management consulting services for the oil and gas industry and Skava, a digital experience solutions company for the retail industry. In the same year, a company announced an ‘Innovate in India Fund’ worth $250 million to support Indian start-ups and also decided to increase the dividend pay-out ratio to up to 50% of post-tax profits.
In 2016, revenues touched $10 billion on the last 12 months (LTM) basis. The company also launched Infosys Mana (now part of Infosys Nia), a platform that brings machine learning together with the deep knowledge of an organisation, to drive automation and innovation.
Infosys also launched Skava Commerce, a new standard for modern, mobile-first and modular e-commerce platforms last year, with multiple investments in Waterline Data, data discovery and data governance software company; Stellaris Venture Partners, an early-stage venture fund; UNSILO, an Artificial Intelligence. start-up focused on advanced text analysis; TidalScale, Software-Defined Servers provider.
All these acquisitions prevented a company from going for the buyback. In April this year, however, the board of the company revised the capital allocation policy and decided to pay out up to 70% of the free cash flow as the dividend or share buyback. Sikka resigned exactly on a day preceding to the important board meeting, wherein the company is slated to take the decision on the buyback of shares.
Pravin Rao takes over
With an eye on $20 billion revenue, the company’s COO, Pravin Rao, takes over Interim Chief Executive Officer and Managing Director. With over 30 years of experience at Infosys, he has seen the company grow into an IT giant. Since joining Infosys in 1986, he has held a number of senior leadership roles including Chief Operating Officer, Head of Infrastructure Management Services, Delivery Head for Europe, and Head of Retail, Consumer Packaged Goods, Logistics and Life Sciences.
Pravin holds a degree in electrical engineering from Bangalore University, India. He is a member of the National Council of Confederation of Indian Industry (CII) and the Executive Council of Nasscom.