LIC to meet finance ministry on Infosys crisis

Life Insurance Corporation of India (LIC) will soon consult Ministry of Finance on the Infosys crisis. According to the sources, the insurer may seek ministry guidance on whether it should tender its shares in the ongoing buyback. 

The state-run insurance company, which owns 7.03 per cent stake in the IT major, is currently mulling on the amount of shares it would tender in the repurchase scheme. A final call on the issue could be taken by LIC after its consultation wit the finance ministry and Infosys management.

"We are yet to take a call the Infosys' buyback offer. Even we participate in the buyback, it will be partial," said a LIC source.

Bogged down by a farce between the Infosys board and founder NR Narayana Murthy, the IT major failed to woo shareholders with its Rs 13,000-crore share buyback offer. The buyback price was fixed at Rs 1,150 a share, a 25 per cent premium to Friday's closing price of Rs 923 a share. On August 18, the stock plunged 10 per cent soon after the company's chief excecutive officer and managing director Vishal Sikka resigned, citing a constant allegations against him by Murthy. Infosys was on LIC's buying list for this month and bought additional shares late last week.

Sources said that Infosys top management and its senior board members will also soon appraise top investors like LIC on the future roadmap in the coming weeks. Meanwhile, the insurer would also meet promoters camp led by Murthy to get their side in this tug of war.

The insurer is the second-largest shareholders in IT major followed by OppenheimerFunds, which has 2.16 per cent stake and Singapore government's GIC, with 2.11 per cent stake, according to the June quarter shareholding data provided by the BSE. HDFC Mutual Fund and ICICI Prudential Mutual Fund, the country's largest fund houses, hold 2 per cent and 1.5 per cent, respectively.

"In the interest of all the shareholders, we want the issue to be resolved at the earliest. We are not happy with the way things have been handled at Infosys. However, it is too early to decide if we would switch our investment to other technology companies," the LIC official had recently said citing Sikka abrupt resignation.