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Abhrajit Gangopadhyay

Bangalore , Sept. 7

HUNDREDS of Infoscians could join their millionaire colleagues as the 1994 employee stock option plan gives rights to over a million Infosys Technologies shares to hundreds of its employees in the near term.

The shares, which at par value of Rs 5 each were issued at Rs 50 each, are currently quoting at over Rs 4,000 at a discounted price/earning multiple of 27.3. Market value of those shares is well over Rs 450 crore at current stock prices of Infosys.

Infosys stock has run up in the recent past and this could induce several Infoscians to exercise their sell option on the stocks vested with them. "There is enough demand for the Infosys stocks in the market... we do not see much pricing correction happening even if there is a spurt in supply in the near term", a technology analyst of an European brokerage said.

Daily volume of Infosys tops million shares on the National Stock Exchange and the Bombay Stock Exchange and increased liquidity in the market could bring in more institutional players from the fringe, analysts added.

Under the 1994 ESOP, 60,00,000 warrants were issued by the company to the Infosys Technologies Ltd Employees Welfare Trust, to be held by the trust and transferred to selected employees from time to time.

Warrants were issued at Re 0.50 each and entitled the holder to apply for and be issued, one equity share at par value of Rs 5 at a price of Rs 50, after five years of the date of the issue. The warrants and the shares to be issued were under a five-year lock-in period from the date of the issue.

The warrants, which were due to expire on September 1999, were all converted into shares.

According to Infosys' recent annual report, 957 employees held shares under the 1994 ESOP with 0-1 year of lock in and 504 employees held rights to 3,18,200 shares, which had a lock in of 1-2 years.

According to analysts, many of the 1994 ESOP holders would be in the middle management and "they perhaps would like to hold on to their stocks as they expect the stocks to soar further in the long-term on the back of strong future growth."

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