SEC clears ADR issue of Infosys

Reliable industry sources said here on Monday, US stock market regulator, the Securities and Exchange Commission, has cleared the second American Depository Share (ADS) issue of Infosys Technologies Limited.

Infosys, which is listed on the NASDAQ, is seeking to convert upto 1.6 crore equity shares listed on the stock exchanges in India, into American Depository Receipts (ADR) through a sponsored secondary issue.

When listed as shares on the NASDAQ, they will increase the company's float on the exchange by some six percentage points, taking the total to 14 per cent.

Sources in Infosys said that they could "neither confirm the news nor deny it... the company will make a statement when it is ready," they said. Infosys sources also said the ADS listing requires approval from the Foreign Investment Promotion Board of the Government of India, among other clearances.

Infosys filed its Form 3/A registration application, required for the ADS listing, with the SEC on January 18. Its stock had closed at $69.90 on the NASDAQ that day. The company's shareholders cleared the ADS issue through a voice vote at an extraordinary general meet last month.

Promoters hold 22 per cent of Infosys equity, foreign institutional investors hold 40.58 per cent and the Indian retail investors, 20.77, with mutual funds and others private investors making up the rest.

The company has appointed Citigroup, Deutsche Bank, Goldman Sachs and UBS to manage the issue. ABN Amro, Bank of America and Nomura are co-managers. The price of the issue will be "discovered" through a book building process, after road shows are held in various important financial centres of the world.