Infosys share price falls almost 3% on $1.5 billion deal termination, weighs on Nifty IT index
Infosys share price fell almost 3 per cent in early trade on NSE on Tuesday, December 26, following its announcement on Saturday, December 23, that it had terminated its $1.5 billion agreement with an undisclosed global company, focused on artificial intelligence (AI) solutions, signed in September.
In an exchange filing on Saturday, the IT major announced, ” This is in continuation to the disclosure made by Infosys via a letter dated September 14, 2023, titled “Company Update” with respect to a Memorandum of Understanding with a global company which was subject to parties entering into a Master Agreement. The global company has now elected to terminate the Memorandum of Understanding, and the parties will not be pursuing the Master Agreement.”
The agreement between Infosys and the company was planned as a 15-year commitment, with the Memorandum of Understanding (MoU) signed on September 14, 2023.
“Infosys has entered into a Memorandum of Understanding with a global company to provide enhanced digital experiences, along with modernization and business operations services, leveraging Infosys platforms & AI solutions. The total client target spend over 15 years is estimated at USD 1.5 billion. This is subject to parties entering into a master agreement,” the company said in an exchange filing made in September.
The deal loss indicates further pressure on Infosys and other IT companies in India to drift over the muted business over the past three to four quarters.
Also Read: Infosys terminates $1.5 billion AI deal with global client
Shares of the company opened at ₹1,535 against the previous close of ₹1,562.90 and soon slipped 2.6 per cent to the level of ₹1,523.
Around 9:20 am, Infosys share price traded 1.77 per cent lower at ₹1,535.20.
The loss in Infosys share price dragged the Nifty IT index lower by almost one per cent. The index was the lone loser among sectoral indices around 9:20 am.
Infosys share price has gained nearly 4 per cent while the Nifty 50 is up nearly 18 per cent this year so far.
Infosys is to announce its Q3FY24 financial results on January 11 following a board of directors meeting commencing on January 10.
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Published: 26 Dec 2023, 09:37 AM IST
