Shares of Infosys on Tuesday faced significant downward pressure on the back of the termination of a Memorandum of Understanding (MoU) with an unnamed global company on December 22. Shares of the second-largest IT company by valuation are currently down by 1.12% in the last two consecutive sessions.

Acknowledging the media report, On December 22, Infosys said in an exchange filing that a global company has decided to terminate the MoU with Infosys, and the two parties were not intent on pursuing the Master Agreement, which endorsed Infosys to provide enhanced digital experiences, along with modernization and business operations services, harnessing the Infosys platforms and AI solutions for an estimated charge of $1.5 billion.

The incident drew special attention as it came just two weeks after the sudden exit of CFO Nilanjan Roy from the company, and the MoU, which was signed in September 2023, was intended for 15 years.

“This is in continuation of the disclosure made by Infosys via a letter dated September 14, 2023, titled “Company Update” with respect to a Memorandum of Understanding with a global company that was subject to parties entering into a Master Agreement,” Infosys said in their exchange filings.

The company further added, “The global company has now elected to terminate the Memorandum of Understanding, and the parties will not be pursuing the Master Agreement.”

The MoU signed on September 14 of this year stated that Infosys and the global company will work together “to provide enhanced digital experiences, along with modernization and business operations services, leveraging Infosys platforms and AI solutions.”.

Earlier, the company had decided to cut the topline growth guidance by 100 basis points to 1-2.5% on the back of declining demand in key markets such as Europe and the USA, despite posting a net profit of RS.6212 crore, which is a 3 percent year-on-year rise.

Consolidated revenue for the second quarter reached Rs. 39994 crore, up by around 7 percent from the previous fiscal. Currently, 12 analysts have a “buy call” for the stock, while 14 analysts recommend “hold” and 3 have “sell” calls.