Investors suffer ~53,000 cr loss, MFS lose ~6,900 cr

The 16.2 per cent single-day crash in the stock has dealt heavy mark-to-market losses to mutual funds (MFS) and foreign portfolio investors (FPIS). MFS have seen the value of their holdings erode by over ~6,891 crore, while the value of FPI holdings has shrunk by over ~17,772 crore.

“As Infosys is a Nifty stock, it is widely held in several equity schemes,” said a fund manager. According to industry estimates, it is held in over 400 schemes. The firm has over 800,000 retail investors holding 5.13 per cent stake. The value of their holding has shrunk by close to ~2,700 crore.

Following concerns over corporate governance lapses-the firm’s market value declined by ~53,131 crore on Tuesday, its largest single-day fall since 2013. The scrip ended at ~643, which was close to its 52-week low of ~600.

On Monday, a letter by a set of employees alleged that the books of accounts were getting window-dressed to hide the real picture of the financials.

The letter alleged that Chief Executive Officer Salil Parekh and Chief Financial Officer

Nilanjan Roy had directed the finance team to follow the alleged ‘unethical’ practices.

Among other investors, LIC held a 6.7 per cent stake in Infosys as of September 3.

Following the share price decline, the value of the insurers’ holding has slipped by over ~3,500 crore.

FPIS held 33.45 per cent stake as of September 3.

According to foreign brokerage firm Jefferies, the multiple allegations were particularly related to large deals and the letter alleged that many of them had negligible margins.

On Tuesday, Infosys chairman Nandan Nilekani said the audit committee was looking into the complaints.

Further, both the CEO and CFO have been recused from the investigation to ensure independence.

This is not the first time the IT giant has found itself in allegations of corporate governance issues. Two years ago, tensions escalated between the founding promoters and the erstwhile management over alleged corporate governance lapses, leading to the exit of the then-ceo Vishal Sikka.