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Infosys at the gate of Nasdaq elite club

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By OUR CORRESPONDENT in Mumbai
  • Published 21.11.06
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Mumbai, Nov. 21: Infosys Technologies today took another leap towards becoming the first Indian company to break into the Nasdaq 100 index after seeking to raise $1.6 billion through its third sponsored American Depositary Shares (ADS).

The top executives and directors of Infosys have put up shares worth $6.95 billion (Rs 31,200 crore) for sale as part of the offering.

The infotech major today priced its sponsored secondary offering of 30,000,000 ADS — equivalent to the same number of equity shares — at $53.50 apiece, excluding underwriting discounts and commissions. At $53.50 per ADS, the size of the offering exceeds $1.6 billion. The ADS will be placed with Japanese investors through a public offer without listing (POWL).

A group of eight directors and executives have together offered over 130 million shares worth $6.95 billion, going by the ADS price of $53.5. However, the unsold shares beyond the total size of the offering would be returned to the shareholders by December 4.

Infosys will not receive any proceeds from this offering. The net proceeds, after the offer expenses, will be distributed to the selling shareholders within 30 days of the closing of the offering, the company said in a statement.

“We are eligible for listing on the Nasdaq 100. Every year, in the middle of December, they review the eligible candidates and announce a fresh list. So we are hoping that we will be there this year,” Infosys CFO V Balakrishnan told The Telegraph.

To get into the Nasdaq 100, a company’s market capital has to be among the top 100 on the exchange. It includes 100 of the largest US and international non-financial securities listed on the exchange based on market capitalisation, including companies like eBay, Yahoo, Starbucks, Amazon and Dell.

The ADS offering includes offers from almost the entire top brass — non-executive chairman and founder Narayana Murthy's 40 lakh shares, CEO Nandan Nilekani's 27.96 lakh shares and chief operating officer S Gopalakrishnan's 27 lakh shares.

In its filing to the SEC regarding the offering, Infosys said: “We are sponsoring this secondary offering by the selling shareholders in part to increase the number of our ADS which are traded on Nasdaq which we believe may increase the likelihood that we are selected to become part of the Nasdaq 100 Index.”