Mired in corporate governance conflict, Infosys should now shift focus on how to use $5 billion cash

Infosys is grappling with too many issues now, latest being the governance conflict. The IT company is also closely monitoring the protectionism talks and tightening visa norms in the US market.

Amidst all this, all eyes are on Infosys and shareholders are worried over how Infosys will spend $5.25 billion in cash.

They are also waiting to see how quickly Vishal Sikka will shift from the worker arbitrage system dominant to the digital model.

"The market is getting impatient about what Infosys will do with the cash,” a top manager at a securities firm told ET, adding “As they raise governance issues, can the Infosys board, management and founders afford to take eyes off the competitive environment? IBM and Accenture are getting stronger in digital businesses.”

"Sitting on cash is dragging return on equity. The only way to lift it is to increase the payout ratio (as TCS and Wipro have indicated) or acquire assets,” Sarabjit K Nangra, vice president, research, IT, Angel Broking told ET.

Another issue Infosys is facing is to adopt digital-first strategy or to continue with the worker arbitrage strategy.

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