Infosys saw one more high-profile exit on Friday, with V Balakrishnan, board member and former CFO, quitting the company, reports fe Bureau in Bangalore. The announcement was surprising since Balakrishnan was widely tipped to be the next chief executive. For Balakrishnan, considered Murthy’s “blue-eyed boy”, the veteran's return was seen as a big opportunity to move up. In fact, many were expecting that he would one day step into the corner office at Infosys. However, several sources indicated that Bala’s departure had not been smooth and that the development was related to succession planning.
Sources said that while Murthy was keen to offer Bala a larger role, perhaps that of the chief operating officer or president, this was apparently objected to by certain board members. The Bangalore-headquartered firm has seen a string of top-level exits since June after NR Narayana Murthy returned as executive chairman.
Several analysts have, however, upgraded the Infosys stock after the $7-billion player turned in a reasonably good set of numbers for the second quarter. The stock has run up sharply and commands a market capitalisation of over Rs 2 lakh crore.
Balakrishnan was playing a key role in the company even after stepping down as CFO.
He was given additional responsibilities of heading key verticals such as utilities and resources in North America, the firm's largest market.
Talking to FE, Balakrishnan said, "I have been thinking about it ever since I gave up the role of CFO. I would now like to work with young entrepreneurs and will launch a new private equity fund that invests in the technology space."
The new fund, to be called Exfinity, will have a corpus of Rs 100-125 crore. Other members of the fund include TV Mohandas Pai, former board member of Infosys, Girish Paranjpe, former joint CEO of Wipro and Deepak Ghaisas, former i-Flex Solutions CEO.
Murthy, executive chairman, Infosys said, “Bala has been an early adopter and a keen anchor-builder of Infosys. It is difficult to imagine Infosys without Bala’s passion, commitment, and intellect. The board and every Infoscion thank Bala for his wonderful contribution and wish him great success in his future endeavours."
Balakrishnan, who was the head of Infosys BPO, Finacle and India business unit, was appointed as the chairman of its European subsidiary Infosys Lodestone early this year replacing fellow board member BG Srinivas. His resignation will be effective December 31, the IT major said in a statement.
“I have enjoyed every moment of my stint at Infosys and it was a great learning experience. While my heart will always be with Infosys my mind wants to do something beyond Infosys. I thank all my colleagues who supported and encouraged me during my career at Infosys. I wish Infosys all the very best in its future endeavours,” said Balakrishnan in a statement.
This development leaves the road wide open for the new CEO to replace the current incumbent, SD Shibulal, whose term ends in 2015. This also opens a debate on whether the company would select an outsider or rely on the internal management ranks.
Mohandas Pai, the former board member of Infosys and chairman of Manipal Global Education, told FE, “Infosys has a strong bench of leaders and company would be able to groom the right kind of leader,” adding: “Balakrishnan is a great talent of high calibre and one of the very few left within Infosys who have watched the company grow from $5 million to over $7 billion.”
The Bangalore-headquartered IT firm also announced induction of UB Pravin Rao as a whole-time director to the board. Rao is currently a member of the executive council and global head, retail, consumer packaged goods, logistics and life sciences. Kiran Mazumdar-Shaw, chairman and managing director, Biocon, has been appointed as an independent member of the board.
“I am pleased to join the Infosys board as an independent director. I have always admired Infosys as a pioneering organisation that has built an impressive global reputation. I am confident under Murthy’s strong leadership the company will continue to deliver strong performance,” she said.
Commenting on these developments, Sudin Apte, CEO, Offshore Insights, an IT advisory firm said, “There will be no immediate impact on Infosys following this exit but the bigger challenge for the company will be to get it back on the path of growth.”
He felt that the changes being effected by Murthy appears like Infosys is recharging its management bandwidth opting for a younger and energetic lot.
Internally, Infosys has seen a management transformation in the last few months, including the reshuffle of its top executives and a string of high-profile exits since June, after Murthy joined back as the executive chairman.
Ankita Somani, an analyst with Angel Broking, points out that the IT major had eight big exits in seven months. “The exits come amidst organisational restructuring that Murthy is overseeing after returning to revive the sagging fortunes of the company in June. The development does indicate that there is a severe management transition happening in the company,” Somani said, adding: “The impact of top management resignations at Infosys will not immediately make an impact to the top line, it may have some effect over a medium term.”
Among the major exits in the last few months were executive council member and head of utilities and resources business in North America Stephen Pratt, who resigned from the organisation last month; Basab Pradhan, senior vice-president and head of global sales and marketing, who resigned in July; and US head of the company’s financial services business, Sudhir Chaturvedi. Another big-name exit was Ashok Vemuri, member of the board and a key figure in the company’s financial services and manufacturing verticals for the US market, who left in August to join Nasdaq-listed IT services firm iGate as its CEO.
Vemuri was also considered a key contender for the CEO's post at Infosys after Shibulal's term comes to an end in 2015. He was one of the highest paid executives in the organisation. According to sources, the decentralisation initiative at Infosys was Vemuri's brainchild, but with Murthy centralising the decision-making and shelving Vemuri's plan to give greater autonomy and bring accountability to business verticals, his hands were tied.
The Infosys share ended Friday at Rs 3,552.30, up 1.08% on the BSE, translating into a a market capitalisation of Rs 2,03,985.91crore. The benchmark Sensex was up 1.79%.
Sources said that while Murthy was keen to offer Bala a larger role, perhaps that of the chief operating officer or president, this was apparently objected to by certain board members. The Bangalore-headquartered firm has seen a string of top-level exits since June after NR Narayana Murthy returned as executive chairman.
Several analysts have, however, upgraded the Infosys stock after the $7-billion player turned in a reasonably good set of numbers for the second quarter. The stock has run up sharply and commands a market capitalisation of over Rs 2 lakh crore.
Balakrishnan was playing a key role in the company even after stepping down as CFO.
He was given additional responsibilities of heading key verticals such as utilities and resources in North America, the firm's largest market.
Talking to FE, Balakrishnan said, "I have been thinking about it ever since I gave up the role of CFO. I would now like to work with young entrepreneurs and will launch a new private equity fund that invests in the technology space."
The new fund, to be called Exfinity, will have a corpus of Rs 100-125 crore. Other members of the fund include TV Mohandas Pai, former board member of Infosys, Girish Paranjpe, former joint CEO of Wipro and Deepak Ghaisas, former i-Flex Solutions CEO.
Murthy, executive chairman, Infosys said, “Bala has been an early adopter and a keen anchor-builder of Infosys. It is difficult to imagine Infosys without Bala’s passion, commitment, and intellect. The board and every Infoscion thank Bala for his wonderful contribution and wish him great success in his future endeavours."
Balakrishnan, who was the head of Infosys BPO, Finacle and India business unit, was appointed as the chairman of its European subsidiary Infosys Lodestone early this year replacing fellow board member BG Srinivas. His resignation will be effective December 31, the IT major said in a statement.
“I have enjoyed every moment of my stint at Infosys and it was a great learning experience. While my heart will always be with Infosys my mind wants to do something beyond Infosys. I thank all my colleagues who supported and encouraged me during my career at Infosys. I wish Infosys all the very best in its future endeavours,” said Balakrishnan in a statement.
This development leaves the road wide open for the new CEO to replace the current incumbent, SD Shibulal, whose term ends in 2015. This also opens a debate on whether the company would select an outsider or rely on the internal management ranks.
Mohandas Pai, the former board member of Infosys and chairman of Manipal Global Education, told FE, “Infosys has a strong bench of leaders and company would be able to groom the right kind of leader,” adding: “Balakrishnan is a great talent of high calibre and one of the very few left within Infosys who have watched the company grow from $5 million to over $7 billion.”
The Bangalore-headquartered IT firm also announced induction of UB Pravin Rao as a whole-time director to the board. Rao is currently a member of the executive council and global head, retail, consumer packaged goods, logistics and life sciences. Kiran Mazumdar-Shaw, chairman and managing director, Biocon, has been appointed as an independent member of the board.
“I am pleased to join the Infosys board as an independent director. I have always admired Infosys as a pioneering organisation that has built an impressive global reputation. I am confident under Murthy’s strong leadership the company will continue to deliver strong performance,” she said.
Commenting on these developments, Sudin Apte, CEO, Offshore Insights, an IT advisory firm said, “There will be no immediate impact on Infosys following this exit but the bigger challenge for the company will be to get it back on the path of growth.”
He felt that the changes being effected by Murthy appears like Infosys is recharging its management bandwidth opting for a younger and energetic lot.
Internally, Infosys has seen a management transformation in the last few months, including the reshuffle of its top executives and a string of high-profile exits since June, after Murthy joined back as the executive chairman.
Ankita Somani, an analyst with Angel Broking, points out that the IT major had eight big exits in seven months. “The exits come amidst organisational restructuring that Murthy is overseeing after returning to revive the sagging fortunes of the company in June. The development does indicate that there is a severe management transition happening in the company,” Somani said, adding: “The impact of top management resignations at Infosys will not immediately make an impact to the top line, it may have some effect over a medium term.”
Among the major exits in the last few months were executive council member and head of utilities and resources business in North America Stephen Pratt, who resigned from the organisation last month; Basab Pradhan, senior vice-president and head of global sales and marketing, who resigned in July; and US head of the company’s financial services business, Sudhir Chaturvedi. Another big-name exit was Ashok Vemuri, member of the board and a key figure in the company’s financial services and manufacturing verticals for the US market, who left in August to join Nasdaq-listed IT services firm iGate as its CEO.
Vemuri was also considered a key contender for the CEO's post at Infosys after Shibulal's term comes to an end in 2015. He was one of the highest paid executives in the organisation. According to sources, the decentralisation initiative at Infosys was Vemuri's brainchild, but with Murthy centralising the decision-making and shelving Vemuri's plan to give greater autonomy and bring accountability to business verticals, his hands were tied.
The Infosys share ended Friday at Rs 3,552.30, up 1.08% on the BSE, translating into a a market capitalisation of Rs 2,03,985.91crore. The benchmark Sensex was up 1.79%.
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