Infosys CEO Vishal Sikka

At a time when investors were expecting happy days after a flat trade for past couple of months because of the proposed buyback program on of August 19, Vishal Sikka resigned as the managing director and chief executive (CEO) of Infosys. No sooner the news broke early on Friday, shares of the IT major tanked as much as 11 per cent intraday to Rs 884.40 on BSE, the highest in last four years. However, it settled down to 9.6 per cent lower at Rs 923.10.

Investors did not appreciate the news of Sikka's resignation and went on a selling spree, which wiped of as much Rs 22,000 crore of company's market value. The company's market value dropped to Rs 2.12 lakh crore from Rs 2.34 lakh crore as of Thursday's close.

Chairman emeritus N R Narayana Murthy along with his family owns close to 3.44 percent stake in the IT major. The value of their combined holding fell by around Rs 770 crore, end of Friday's trade, the Economic Times reported.

However, analysts see this as temporary hiccups and believe that downside will be limited. But many market analysts believe the timing of Sikka's resignation caught them off guard as the company's board is meeting decide on share buyback on Saturday.

ET quoted Sarabjit Kour Nangra, vice-president of Research-IT at Angel Broking saying, "While it's a setback for the company in near-term, but given the strength of the board, we believe it will be overcome the setback. Given the valuations, we maintain our buy rating on the stock with a price target of Rs 1,179."

Vikas Khemani of Edelweiss Securities told ETNow that the next three to six months will be very critical for the IT firm. "The market will have to wait and watch. The buyback will provide some sort of downside protection to the company," Khemani said.

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Post Sikka's resignation the company released a statement which says, "Mr. Murthy's continuous assault, including this latest letter, is the primary reason CEO, Dr. Vishal Sikka, has resigned despite strong Board support."

With a counter statement, co-founder of the Bangalore-based IT major Narayana Murthy hit backs at the board said, "Extremely anguished by the allegations, tone and tenor of the statements."

Stepping down from the position of CEO and MD, Sikka said he would now assume the position of executive vice-chairman of Infosys, which entails an annual salary of $1.