Infosys prices sponsored secondary issue at $49 per ADS

Friday, 01 August 2003, 07:00 Hrs
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NEW YORK: Infosys Technologies, India's largest listed software exporter, has priced its sponsored secondary issue of American depositary shares (ADS) at $49 each, representing a premium of 26.8 percent.

The secondary issue offering was for 5.22 million ADS, representing 2.61 million Indian shares of the company, Nandan Nilekani, CEO, president and managing director of Infosys, told a press conference at the Nasdaq stock market Thursday.

One Infosys ADS represents two Indian shares of the company. Underwriters to the issue have a seven-day option to purchase up to 782,000 additional ADS, representing 391,000 Indian shares, said the Infosys co-founder.

He said he did not have the specifics yet about how many times the issue was oversubscribed but noted: "Two of our teams met with over 200 investors in Asia, Europe and the U.S.

"And we had an overwhelming response from both retail and institutional investors, and existing and new investors."

In what is being described as the first move by an Indian company, Infosys had in early July made an offer to its Indian shareholders to sell their shares to it so that the company could issue ADS to improve liquidity in the U.S. market.

The proceeds of the sponsored secondary offering, estimated at around $258 million, are to be returned to shareholders who sold their shares back to the company after deducting expenses.

Nilekani said the move was aimed at helping shareholders in India take advantage of the arbitrage premium between the company's stock prices in India and Nasdaq and improve liquidity in the overseas market.

"There is no financial gain for Infosys, since the net proceeds from the issue would be returned to all selling shareholders," he said.

Infosys became the first Indian company to list its shares in the U.S. on May 11, 1999, when the company's ADS started trading at the tech-laden Nasdaq stock exchange. Its revenues have grown from $68 million then to $1 billion now.

Nilekani said he expected the company to grow by 35 percent in volume terms and 28 percent in revenue during the current financial year.

He said despite the downturn in the global tech market, 35 percent of its revenues came from new services due to a 7.4-percent increase in spending on sales and marketing.




Source: IANS
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