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Our Bureau

Bangalore April 4

SOFTWARE major Infosys Technologies has obtained a credit rating from Standard & Poor's, which is higher than the agency's sovereign rating on India. S&P's Ratings Services has assigned Infosys `BBB' local currency and `BBB-' foreign currency rating, said a company press release.

India's current sovereign rating is BB+/Stable/B by S&P. The ratings reflect Infosys' very conservative financial profile and policy, which feature ample liquidity, strong operating cash flow, and a debt-free balance sheet, said a company press release.

"Infosys sought the rating on its own initiative," the board member and Chief Financial Officer, Mr T.V. Mohandas Pai, said. He added the rating was taken as part of the risk management and benchmarking exercise.

However, Mr Pai clarified that the company did not have any plans to raise debt overseas in the near future. He also indicated that the company did not have any plans to extend guarantees to associate/subsidiaries.

Besides, industry analysts also said that the rating was unlikely to influence Infosys' proposed secondary sponsored offering of American Depository Shares.

"Infosys' good track record in the industry, its strategy of funding expansion through internal cash resources, and good debt capacity should allow the company to maintain a strong financial profile in the case of more adverse business conditions," said the S&P's Credit Analyst, Mr Greg Paul, Director in the Corporate and Infrastructure Ratings Group.

"Indian companies are globalising rapidly and a good credit rating is a competitive advantage. This rating proves that the Indian industry is coming of age globally," Mr Pai said.

The stable outlook on Infosys' ratings takes into account S&P's expectation that Infosys will maintain its competitive position and strong financial profile, and that the company will manage the expansion risks inherent in its growing global operations.

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