The Hindu Business Line : Third sponsored ADS issue on cards

Infosys Technologies Ltd is coming out with a sponsored American Depository Share (ADS) issue yet again. This will be the third such sponsored issue since 2003.

As part of the proposed issue, Infosys will allow its domestic investors to sell their shares overseas, including Japan where the company will go for a public offer without listing (POWL). The Infosys board on Wednesday approved sponsored issue, wherein the company would acquire as many as 30 million shares from Indian investors and sell them in the form of ADS to overseas investors.

At Tuesday's closing price of $49.50 on Nasdaq, the proposed ADS issue size would touch $1.5 billion. However, the company has not decided on the timing of the issue.

Currently, the ADRs of Infosys, which is equivalent to one local share, are traded at a premium of 19 per cent above the price on the BSE. Infosys will not issue any new share through the issue and would be seeking the shareholders' approval on November 7.

Infosys, which got listed on the Nasdaq in 1999, has subsequently floated two sponsored ADS issues in 2003 and 2005. The size of the previous ADS issue in May 2005, wherein the company converted 16 million shares at $67 each, exceeded $1 billion.

The proposed issue would increase Infosys' floating stock on Nasdaq. At present, about 14 per cent of the company's stock is traded overseas. The increased float is expected to help Infosys to achieve its long-standing aim of getting into famed indices like Nasdaq 100.

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