Financial Daily from THE HINDU group of publications
Friday, May 27, 2005
Financial Daily from THE HINDU group of publications Friday, May 27, 2005 |
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Info-Tech
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Software Markets - Stocks Infosys ADS priced at $67; response huge Our Bureau
Bangalore , May 26 INFOSYS Technologies Ltd converted its 14 million Indian shares into US stock at $67 each in a billion-dollar sponsored secondary offering on Thursday. The pricing of the American Depository Shares (ADS) was at a discount of 2.5 per cent over Wednesday's Nasdaq closing of $68.75. However, the ADS pricing was at a 34 per cent premium over the domestic closing price. At this pricing, the ADS issue size works out to $938 million, making it the largest sponsored ADS offering by an Indian firm. The underwriters have a seven-day option to buy an additional two million ADS. In the event of this option being exercised, the issue size would escalate to over a billion dollars. Infosys is offering 3.2 million shares to Japanese investors through a public offer without listing (POWL) as part of the issue. This is the first POWL issue by any Indian company. The issue would increase the Infosys float on Nasdaq to 14 per cent from eight per cent. "The billion-dollar issue was oversubscribed by almost eight times, with Japanese investors showing keen interest. The issue was oversubscribed in Japan by three times," said Mr T. V. Mohandas Pai, Chief Financial Officer, in a post-issue conference call. About 15,000 retail investors offered to sell some 52.4 million shares in the issue, Mr Pai said. The combined holdings of all the shareholders who tendered their shares in the issue was over 18.43 crore shares. The allocation, which is based on the Government of India formula and linked to the shareholders' holdings, was at 8.64 per cent. For every hundred shares tendered by the shareholders, about 8.64 shares were accepted depending on the holdings, Mr Pai added. With the maximum size of the issue pegged at 16 million, the unsold shares would be returned to all selling shareholders by June 15. The company will not receive any proceeds of this offering and the net proceeds, after the issue expenses, will be distributed to the selling shareholders within 30 days, Mr Pai said. The issue saw a robust demand from institutional and quality investors, Mr Pai said. About 50 per cent of the demand came from the US investors, while Europe and Asia accounted for 30 and 20 per cent, respectively. Infosys' Deputy Managing Director, Mr S. Gopalakrishnan, said with this issue, the company aims to enhance its visibility in the overseas market. "We are a step closer to our objective of getting into the Nasdaq indices," he said. The promoters and directors of Infosys, who have sold over 5.16 million shares in the issue, will be netting over Rs 1,500 crore.
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