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regular-article-logo Friday, 19 July 2024

Infosys stock tumbles as markets react negatively to collapse of USD 1.5 billion AI deal

On Saturday, the country’s second largest IT services firm had disclosed that a global company with whom it had entered into a Memorandum of Understanding in September had decided to terminate the deal

Our Special Correspondent Mumbai Published 27.12.23, 11:38 AM
Representational image

Representational image File picture

The Infosys share on Tuesday lost more than 2.5 per cent of its value during intra-day trades, but was able to recoup part of the losses as investors reacted negatively to the news of the company losing a $1.5 billion AI contract.

Shares of the Bangalore-based firm fell to a day’s low of Rs 1,522.50 on the BSE. It recovered some of its lost ground to close at Rs 1,544.50, a drop of 1.12 per cent, or Rs 17.50, on the BSE.

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Similarly, on the NSE, the scrip fell to an intra-day low of Rs 1,523 and later ended at Rs 1,546, marking a fall of Rs 16.90 or 1.08 per cent.

On Saturday, the country’s second largest IT services firm had disclosed that a global company with whom it had entered into a Memorandum of Understanding in September had decided to terminate the deal.

This memorandum was to provide enhanced digital experiences, along with modernisation and business operations services, leveraging its platforms & AI solutions.

Infosys had earlier disclosed that the total client target spend over 15 years for the contract was estimated at $1.5 billion and that the deal is subject to parties entering into a ‘Master Agreement’. The parties will not be pursuing the master agreement.

With various central banks hiking interest rates since 2022, IT services firms have seen cutbacks in firms’ discretionary spend which in turn has affected their growth rates. This has seen Infosys cutting the revenue guidance for the full fiscal during the quarter ended September 30, 2023.

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