* Shareholder payout plans come after pressure from founders
* Firm has been accused of corporate governance lapses
* Reports small rise in quarterly net profit
* CEO: $20 bln revenue target by 2020 "incredibly difficult thing" (Adds CEO comment on revenue target)
By Sankalp Phartiyal and Arnab Paul
MUMBAI/BENGALURU, April 13 (Reuters) - Infosys set a $2 billion cash return to shareholders and appointed an independent director as co-chairman, moves that may placate a group of founders and former executives who have criticised India's second-biggest software services exporter.
Some founders and former executives of the Bengaluru-based company have publicly accused its board of governance lapses and had urged it to reward shareholders through a share buyback like rival Tata Consultancy Services did with a $2.4 billion buyback announced in February.
Infosys said on Thursday it would return up to 130 billion rupees ($2.02 billion) to shareholders in the fiscal year ending March 2018, adding the manner of the payout will be decided by the board. It also appointed independent director Ravi Venkatesan as co-chairman of the board.
Hugh Young, managing director of Aberdeen Asset Management Asia, said the payout and the new appointment were positive. Aberdeen owned Infosys shares as per latest data available as of end-February.
"Infosys' balance sheet remains very strong and can still accommodate proper investment," said Young. "The new appointee hopefully allays governance, expertise concerns."
Shares in Infosys were down 3.7 percent at 0812 GMT, however, as the market had been hoping for a larger payout and a stronger outlook.
Infosys said it expects revenue to grow 6.5 percent to 8.5 percent in constant currency terms during 2017-18.
"It is a challenging environment out there," CEO Vishal Sikka said at a press conference, adding that the outlook was tempered by the company's most recent quarterly performance.
Infosys is also likely to struggle to reach its ambitious $20 billion revenue target by 2020, as the $150 billion Indian software service sector has been hit by cautious client spending due to a wave of protectionism under the new U.S. administration.
"With the performance that we have seen in the last few quarters it was already a difficult thing and now it's an incredibly difficult thing," Sikka said.
The United States is the largest market for Indian software service companies and an Indian industry lobby group in 2016 cut its forecast for the sector's growth in the year to March due to global uncertainties.
Infosys reported a small rise in consolidated net profit to 36.03 billion rupees ($559.5 million) in the three months to March, from 35.97 billion rupees in the year-ago quarter.
Analysts, on average, had expected a consolidated profit of 35.67 billion rupees, according to Thomson Reuters data.
Quarterly revenue grew 3.4 percent year-on-year to 171.20 billion rupees.
"It's a lackluster kind of result and guidance," said Dipen Shah, head of private client group research at Kotak Securities.
The company said it was positive on its financial services business, while retail was likely to remain volatile during the year.
"In U.S. particularly we've seen a couple of rate hikes and an easing of regulatory pressure so we expect some of the spend to come back later in the year, in terms of discretionary spend. So we remain fairly confident on the financial services," said Pravin Rao, the company's chief operating officer. ($1 = 64.3975 Indian rupees)
Additional reporting by Anshuman Daga in SINGAPORE, Anya George Tharakan and Tanvi Mehta in BENGALURU; Editing by Edwina Gibbs and Muralikumar Anantharaman