Infosys sees ADS aiding global brand image

Infosys Technologies' latest American depository share (ADS) sale will attract more international attention to both "brand Infosys" and the company's stock, S Gopalakrishnan, chief operating officer, Infosys, has said.

Infosys has offered 14 million ADS for sale on the Nasdaq at $67 a share, and underwriters of the sale have an option for an additional 2 million.

Gopalakrishnan said, "We want mainstream international funds to own Infosys stock, get better analyst coverage and, of course, get on the Nasdaq index."

The roadshow conducted to promote the ADS issue showed that the firm had secured the attention of serious investors, Mohandas Pai, the company's chief financial officer, said.

"We conducted some 90 one-on-one interviews and attracted some 150 quality investors," he said, while declining to name any investor.

"The year saw us emerging as a true global brand," the company's annual report says. Infosys was "rated as the number-three IT services company in the world" by Business Week magazine's Tech100 survey, and also figured among the "100 most respected companies in the world" in a survey by the Financial Times newspaper and PricewaterhouseCoopers, a consultancy.

The company also succeeded in getting favourable assessments from leading industry analysts. One analyst firm commended Infosys's forming a high-end consultancy as one of many investments that would "boost the company from being a top tier Indian vendor to a top tier global vendor", the report says.

The latest ADS offering floats some 6 per cent of the company's total stock on the Nasdaq, taking the total to 14 per cent.

In addition, 38.4 per cent of the remaining 86 per cent (Indian stock) was in the hands of foreign institutional investors (FIIs), Pai said.

In total, around 47 per cent of the company's stock would be in foreign hands, assuming that the FII share stays put.

As part of the ADS offering, Infosys will place 3.2 million ADS representing the same number of Indian equity shares with Japanese investors through a public offer without listing (POWL). This is the first POWL issue by any Indian company, Pai said, and the interest from the Japanese far exceeded the amount of stock offered.

The Japanese placement was about 20 per cent of the total offer, dominated by the US at 50 per cent. European investors picked up about 20 per cent and the rest was in Asia (excluding Japan), Pai said. Institutional investors picked up 85 per cent of the offering and retail investors the rest.