Majority stake in Infosys may be foreign

Even as the Board of Infosys Technologies gave an approval to the sponsored Secondary ADS offering on Monday, the company is all set to go "Global" in the true sense.

The result of the current approval is most likely to take Infosys to a stage where foreign entities will have a majority stake in the company.

As on September 30, 2004, the total foreign shareholding including ADR holdings is 13,17,94,778 shares or 49.21 per cent. However, it will, in all probability, cross the majority 51 per cent after the sponsored Secondary ADS offering comes to a close.

According to sources, "The total increase in the US stock float will be about 6 per cent as a result of this 16 million ADSs infusion. Even if the Foreign Institutional Investor participation is to the extent of 2-3 per cent, the actual foreign holding in the company may be 51 per cent or more."

Today, of the total 267.8 million shares, about 131.7 (49.21 per cent) million shares constitute foreign holding. Of this 131.7 million, nearly 21.2 million shares are in the form of ADS.

An additional 16 million shares, post second ADS offer, will take the overall foreign equity to 147.7 million shares. This will include both ADS and the other foreign shareholders.

The current Indian shareholding, including those of promoters, is 50.8 per cent or 136.06 million equity shares. Following the offer, if 16 million shares are tendered and accepted, the Indian shareholding will reduced to 120.06 million shares.

About two years ago, the Board of Infosys had passed an enabling resolution allowing the foreign holding in the company to go up to 100 per cent.