The country’s tech giant Infosys saw a steep fall in shares by 3% to its lowest level since past 8 months closing at Rs. 1,028 recorded in an early morning trade on Tuesday. The reason behind sloping of shares was withdrawal its main project William & Glyn by Royal Bank of Scotland, Infosys’ key client in the network. The bank has set up a separate unit in the United Kingdom for a standalone venture.
RBS being one of the key clients of Infosys, was a massive backup to William & Glyn which has been a program technology partner for many years. The primary focus towards application delivery, providing testing services, consultation along with subsequent decision-making might lead to a cut-off of minimal 3,000 employees in next few months primarily in India.
The bank earlier made an announcementregarding the withdrawal from the project thus to separate itself so as to establish itself individually in UKand pursue other options for divestments of the business. William & Glyn project will be named as a separateentity and rather explore various options to sell it to another lender. Infosys, on the other hand, along with IBM, had won a deal in September 2015, to develop computer systems for William & Glyn for worth Rs. 2,500 crores. But lately, the withdrawal of the project by RBS resulted in fall of shares by 8% in the stock market.
During the filing in BSE, Infosys stated that The Royal Bank of Scotland announced last week that it will no longer pursue its plan to separate and list a new UK standalone bank, Williams & Glyn (W&G), and instead will pursue other options for the divestment of this business. RBS is a key relationship for Infosys and the company looks forward to further strengthening our strategic partnership and working with them across other strategic and transformation programs.
Post Brexit, shares of Infosys has been sloping down since June 2013 thus resulting in as much as 15% low against 4% rise in S&P in the Sensex closing at Rs. 1,212. As per last week, on Friday the shares sloped down by 1.28% closing at Rs. 1,063.30. The company’s revenue for Fiscal Year 2016-17 has been lowered from 11.5% to 13.5% to 10.5% to 12%. Soon it closed at Rs. 1,060 with stocks at its lowest by 9.78% in a record. A combination of 2.28 million equity shares changed its hands over the counter in the first minutes of an opening in BSE as well as NSE.
Also, in June 2016, it recorded a net profit of $511 million out of $2,501 million thus transferringthe revenue growth into 10.9% on a yearly basis along with 12.1% regarding currency on a constant basis.