The Hindu Business Line : Infosys to consider bonus

Shareholders of Infosys Technologies Ltd can look forward to a shower of bounty this year, as the company proposes to issue bonus shares on the eve of its Silver Jubilee celebrations in July.

Infosys is also slated to cross the significant milestone of $2-billion revenue mark for the quarter-ended March 31, 2006. The company would be declaring its fourth quarter and annual results on April 14.

On Thursday, Infosys made a revised communication to the National Stock Exchange, in which it included the issue of bonus shares in its agenda for the board meeting on April 14. Surprisingly, the agenda of bonus issue did not figure in its notice to the Bombay Stock Exchange (BSE) on Wednesday. In the past month, Infosys shares have gained by about nine per cent, and closed on the BSE at Rs 3,114.40 on Wednesday.

Investor expectation

The market, for some time now, has been anticipating rich rewards both in the form of bonus and big dividends from Infosys this year. The company, which declared an interim dividend of Rs 6.5 per share (130 per cent on par value of Rs 5 each) in October, is also likely to consider a final dividend, if any, on April 14.

The shareholders' expectations are bolstered by the huge reserves and surplus that Infosys has on its balance sheet. At the end of December 31, 2005, the company's reserves and surplus was approximately 52 times that of its equity. The reserves and surplus stood at Rs 7,113 crore as against the share capital of Rs 137 crore.

Past rewards

In 2004, Infosys issued a 3:1 bonus and doled out hefty dividends when it crossed the billion-dollar revenue mark. . Infosys has issued eight bonuses till now, since it went public in 1993. An investor, who owned a single share in 1993, if he had held on to all his shares, accumulated the bonuses and stock splits, would own 1,024 shares now. The company had split the share once from par value of Rs 10 to Rs 5 in February 2000. The proposed bonus this year would see the investor holding swell further.

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