The Nifty 50 was 0.04% lower at 11657.15 points. Photo: Mint
The Nifty 50 was 0.04% lower at 11657.15 points. Photo: Mint

Sensex, Nifty flat; Infosys slumps 15% on whistleblower complaint

  • At 2.11 pm, the Sensex fell 0.64% to 39032.93 points, while the Nifty 0.45% to 11609.40 points
  • In early deals on Tuesday, shares of Infosys Ltd slumped 15% after an anonymous whistleblower letter alleged that the company’s CEO Salil Parekh dressed up the company’s books

The Indian markets on Tuesday fell nearly 0.7% after Infosys slumped after an anonymous whistleblower complaint.

At 2.11pm, the Sensex fell 0.64% to 39,032.93 points, while the Nifty 0.45% to 11,609.40 points.

In the absence of any major domestic event, global cues such as US-China trade talks and development on the Brexit front will be closely watched, said Ajit Mishra, vice-president, Research Religare Broking.

Shares of Infosys Ltd slumped 15% after an anonymous whistleblower letter alleged that the company’s chief executive officer Salil Parekh dressed up the company’s books — accusations that could plunge the software services provider into its second leadership-related crisis in a little over two years.

"Our analysis suggests that some of the aforementioned claims are not justified by the publicly available data. Nonetheless we expect the stock to be volatile till the company clarifies on these complaints. More importantly as happened in the past with such issues, this could arrest the re-rating that had started recently post solid operational performance in trailing 12 months and could potentially lead to lower target multiples in the interim," Motilal Oswal Research said in a 21 October report.

"As of now we maintained our stance/estimates and await further clarity on the outcome of the audit committee's investigation," the report added.

Other IT stocks also fell. HCL Technologies fell 3.7%, Tech Mahindra declined 1.7% and Tata Consultancy Services Ltd dropped 0.4%.

ICICI Bank rose 4% to hit an all-time high as analyst expect nearly a $1-billion inflow into the private lender on account of a likely increase in its weight on the MSCI Index. Motilal Oswal expects ICICI Bank’s weight in the world’s largest index compiler to increase to 6% from 3%, attracting an overseas inflow of $1.2 billion.

L&T Technology Services Ltd fell 9% after the company posted revenue growth of 2.5% quarter-on-quarter in constant currency terms, which was a bit softer than expected by the company.

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