IT shares fall for 6th straight session; Coforge, Infosys, TCS fall up to 6%

According to fresh market updates, IT index slid 3% on September 9 with constituent Coforge tumbling up to 6% after Chairman Om Prakash Bhatt resigned following concerns boosted by an internal audit over the firm's board evaluation process.

Bhatt resigned after an internal audit into a board evaluation found concerns, including that material information around his own performance had not been fully disclosed to the board.

Bhatt, who previously served as chairman of State Bank of India, was appointed chair of Coforge's board in 2024 with a term due to finish in April 2027.

An audit into the board evaluation process and the resulting report, which were handled under Bhatt's guidance, identified concerns around how the report "had been dealt with and presented to the board", the firm stated. This included concerns that material information around Bhatt's own performance had not been fully disclosed to the board.

At 10 am on September 9, Nifty IT index was trading 3% softer with Coforge leading losses. Infosys, Tech Mahindra were among top Nifty losers by declining 3.6% and 3.3%, respectively. The sectoral index declined for sixth straight session, falling over 10% during the same period.

The firm did not elaborate on the specific nature of the information around Bhatt's performance that had not been disclosed to the board.

The board boosted its concerns with Bhatt and was evaluating his response when Bhatt tendered his resignation on September 8.

"The immediate change in leadership creates a degree of governance uncertainty, particularly as the resignation stems from concerns identified through an internal audit rather than being a routine transition," ICICI Securities stated in a note.

In his resignation letter, which was included in the regulatory filing, Bhatt maintained that he had acted in good faith.

"I believe that continuing on the Board while there stays a disagreement considering the characteristics of my good faith actions in the Board evaluation process would not be conducive to the effective functioning of the Board," Bhatt stated in the letter.

Coforge named Vivek Sharma, a non-executive independent director, as interim chair until January 31, 2027.