Infosys bounces back 6% from day's low on heavy volumes

Shares of Infosys slipped 4 per cent to Rs 615, but recovered later, on the BSE on Wednesday as sentiment continued to remain subdued due to window-dressing allegations by whistleblower groups.

At 10:30 am, the stock was trading 1.3 per cent higher at Rs 651 per share. In comparison, the S&P BSE Sensex was ruling 0.42 per cent higher. The stock bounced back 6 per cent from day's lows and touched an intra-day high of Rs 655.35 apiece. Trading volumes more than doubled on the counter in the intra-day deals.

According to news reports, markets regulator Securities and Exchange Board of India (Sebi) could seek clarification from the IT major on charges level levelled by the whistle-blower. 

ALSO READ: US law firm readies class suit against Infosys to recover losses

A whistle-blower group, on behalf of employees, alleged that the current management, including CEO Salil Parekh, was taking ‘unethical’ steps to raise short-term revenue and profit. It also alleged that the Bengaluru-based firm’s CEO had not taken the necessary approvals before entering into large deals.

The company issued a statement on Tuesday saying it has placed both Complaints before the Audit Committee on October 10, 2019 and before the non-executive members of the Board on October 11, 2019. "These Complaints are being dealt with in an objective manner. The undated whistleblower complaint largely deals with allegations relating to the CEO’s international travel to the US and Mumbai," the statement added.

Moreover, Sebi has sought clarification from the company as to why it did not disclose about the receipt of the letter to the exchanges.

ALSO READ: Allegations to remain pain point for Infosys stock in near term: Brokerages

In another development, US-based Rosen Law Firm has said it was preparing a class action lawsuit to recover losses suffered by investors in the wake of allegations of "unethical practices" at the IT major. In a statement, Rosen Law Firm said it is "investigating potential securities claims on behalf of shareholders of Infosys Ltd resulting from allegations that Infosys may have issued materially misleading business information to the investing public".

On Tuesday, Infosys reported its sharpest intra-day fall, down over 16 per cent, in more than six years. Earlier on April 12, 2013 it fell 22 per cent in the intra-day trade. The stock yesterday contributed 451 points to Sensex's fall.