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Five years after it listed on NYSE Euronext’s (NYX) London and Paris markets, Infosys has decided to voluntarily delist.
In a statement to the exchanges, the country’s second largest software exporter said: “Infosys announces its intent to voluntarily delist from Euronext Paris and Euronext London Exchanges.”
The announcement came after market hours. Infosys shares closed at ₹1,185, up by almost 2 per cent when compared to Friday’s close.
No change to ADS
Also, there will be no change to Infosys’ American Depositary Share (ADS) count, capital structure and the total stock float, as a result of the proposed delisting from the above exchanges, Infosys clarified. By offering ADS, foreign companies get access to a wider investor base, which can also lower costs of future capital.
Industry watchers opine that this development will not have any material impact on the company’s performance in Europe, which contributed to 24.4 per cent in the December-ended quarter, a growth of 18.7 per cent when compared to the year-ago period. There will be of no fundamental impact and the development is not of much consequence, said Urmil Shah, IT analyst, IDBI Capital.
Additionally, ADS holders can continue to trade on the Euronext Paris and London exchanges until the date of completion of the proposed delisting.
Once the approval for delisting goes through, a sales facility will be provided by Infosys to the holders of ADS trading on the Euronext Paris and London exchanges. ADS holders, who opt for the sales facility, will be able to sell on the NYSE in accordance with Euronext Paris and Euronext London rules. However, those shareholders who do not opt for the sales facility can continue to keep their ADS and will be able to trade on the NYSE.
Further, the delisting is a first for the company, which will continue to trade on NYSE and the Indian exchanges.
One of the primary reasons for delisting was due to the low average day trading volume of Infosys shares, which does not justify the related administrative requirements, which are expensive in those exchanges.
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