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Cognizant Technology Solutions, the US-based IT company with a large offshore presence in India, celebrated 20 years of being a Nasdaq-listed company at a time when it is facing challenges like tax-related issues in an Indian court and allegations of bribery in the US.
But for the two ‘black marks’, the company has had a spectacular growth — both in revenue and employee headcount — especially in India.
To mark 20 years as a Nasdaq-listed company, Cognizant’s Chief Financial Officer Karen McLoughlin led her colleagues and special guests in ringing the exchange’s closing bell on Monday at New York’s Times Square.
“Celebrating 20 years listed on the Nasdaq is a major milestone for us,” said McLoughlin in a press release. “Cognizant has evolved into a $15 billion global technology and services leader with more than 260,000 employees worldwide (over 75 per cent working in India). We are proud to be playing a central role in building the digital economy.”
Soaring scrip
The company launched its IPO in June1998, trading under the Nasdaq ticker symbol CTSH at $10 per share. Since then it has grown to be included in the Nasdaq-100 Index, which comprises the largest non-financial companies listed on the exchange. It has grown from a $60-million software development and maintenance services company to a $15-billion global professional services leader.
Within 10 years of CTSH first crossing the ticker, Cognizant entered the Fortune 1000, was ranked No 3 among Fortune’s Most Admired Companies in the Infotech Services category, and was named No 7 on the Forbes Fastest Growing Technology Companies list, said the press release.
The company’s share price on the Nasdaq started trading at $0.21 to hit a 52-week high of $84.71 in March 9, 2018 to end at $78.70 on June 22.
Major setbacks
Two major developments have rocked Cognizant’s smooth sailing. The first was when the company, on September 30, 2016, voluntarily announced it was conducting an internal investigation into whether certain payments relating to facilities in India were made improperly and in possible violation of the US Foreign Corrupt Practices Act and other applicable laws.
On the same day, the company announced the resignation of its President, Gordon Coburn.
The controversy had Cognizant’s stock dropping to $45.57 on the Nasdaq during intra-day trading. On September 30, in a single day, nearly $4.4 billion in Cognizant’s market capital was wiped out after the investigation was announced.
In another development, Cognizant has been fighting a battle in the Madras High Court challenging the IT Department’s recovery proceedings for alleged non-payment of dividend distribution tax at 15 per cent on remittance of ₹19,415 crore to its non-resident shareholders in the US and Mauritius. This is towards a buyback of 94 lakh its equity shares in May 2016.
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