Whatever be the business impact of NR Narayanmurthy’s return to an executive position in Infosys, stock market circles are increasingly abuzz with a possible leak of Murthy’s return and trading based on insider information on Friday, 31st May. Murthy’s return became publicly known on Saturday morning.
The data on price movements and volumes is certainly suggestive. Friday was a particularly bad day on the markets. The Sensex and the Nifty fell around 2.3 per cent. Tech stocks didn’t fall that much but were generally flat with TCS and HCL, for example showing minute changes.
In sharp contrast, Infosys had a robust day, rising 3 per cent for no discernible reason at all. Not just that, volumes rose sharply too. Infosys’ Friday volume was twice that of the year’s average. Not just that, 61 per cent of the day’s volume came in the last one hour before market close. There’s more--this bump in volume occurred only on the NSE and not on the BSE or later on NASDAQ.
In response to market buzz, Infosys has already issued a statement which is a bland denial that would have done a cricket boss proud, “We are a company that prides itself on adhering to the highest levels of corporate governance at all times. These are baseless speculations and we cannot comment on them.”
However, the exchanges and SEBI owe investors a little more. NRN’s return was highly privileged information that would have been known to no more than 10 or 12 people. Unlike leaks of financial or operational news, the circle of privilege was tiny. If there was a leak then the authorities must do their job.
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