Infosys won’t cut ties with Panaya, will leverage its licences instead

IT major Infosys has decided not to completely sever ties with Panaya and Skava, the two companies it has put on the block. It is instead open to selling the licences of their products.

The acquisition of Panaya in 2015 had resulted in a major crisis at Infosys after a whistle-blower raised concerns over the lack of transparency in the deal. The acquisition was initiated by Infosys’ then CEO and MD, Vishal Sikka. The controversy over the deal finally led to his exit in 2017.

‘Nothing wrong’

Infosys’ Chief Operating Officer UB Pravin Rao told

BusinessLine that there was nothing wrong with the acquisitions of both Panaya and Skava, and that they were not bad products. “...but now the realisation is that there are other strategic priorities ... much more in line with our DNA. So, we can continue to leverage them in a different form, rather than from an ownership perspective.”

He said Infosys had realised that it was not necessary to own the two companies, but that they could be licensed.

As on March 31, 2018, the fair value of Panaya was assessed at $130 million. In 2015, Panaya was bought for $200 million, and another $230 million was invested in the company as part of the acquisition cost.

The final sale price for Panaya is expected to be lower than the recorded fair value as of March 31, 2018, the filing said.