In a market openly hostile to infotech stocks, Infosys Technologies managed to price its secondary American depository shares (ADS) at $49 each.
Till reports last came in, the Infosys ADS was trading on the Nasdaq at $51.50, representing a 5 per cent premium to the offer price.
The current Infosys issue of 5.218 million ADS (representing 2.609 million equity shares) represents the first secondary offering by an Indian company in which retail investors have participated enthusiastically by offering their domestic shares to be converted into depository receipts.
Each ADS represents half a domestic share. At $51.50, the ADS was trading at a 24 per cent premium to the domestic closing price on Thursday of Rs 3,593.30 a share.
Infosys Chairman and Chief Mentor N R Narayana Murthy, CEO Nandan N Nilekani, Nasdaq CEO Robert Greifeld and Vice-President Bruce Aust were present at the listing ceremony.
On the telephone from the US, Vallabh Bhansali, director of Enam Securities, said, "The issue being priced at a premium is a healthy sign for Indian tech companies despite a large float."
The underwriters to the issue have a seven-day option to purchase up to 782,000 additional ADSs, representing 391,000 equity shares.
According to a statement, Infosys will not receive any proceeds of this offering. The statement says the net proceeds after the issue expenses will be distributed among all the selling shareholders within 30 days of the closing of the offering.
The ADS issue had concluded on July 25, 2003, with 10,164 offers for 14,863,802 equity shares.
The unallocated shares will be returned to the respective shareholders by August 16. The maximum offer size was of 3 million equity shares.
The offering was lead-managed by Citigroup, Goldman Sachs (Asia) LLC and Merrill Lynch & Co, and co-managed by Deutsche Bank Securities and UBS Investment Bank.
