Vishwanath Kulkarni

Bangalore , Nov. 5

INFOSYS Technologies is gearing up for another sponsored secondary American Depository Shares (ADS) offering.

The company's board will meet on Monday, to consider the proposal to sponsor the issue of ADS against the company's existing equity shares.

Infosys did not disclose any further details, but the market expectation is that the issue size in value terms could be in the range of $500 million to $700 million, much larger than the previous issue.

The market has been widely expecting another sponsored ADS issue from Infosys and the stock has gained significantly over the last few weeks on this expectation.

Industry sources said the proposed ADS issue would help the company enhance the float of its stock on Nasdaq. In turn, this increased float could help Infosys qualify to obtain a slot in the Nasdaq 100 Index, the main index of the exchange.

A senior Nasdaq official recently told Business Line, "Infosys is close to breaking into the Nasdaq 100 Index and it is matter of months before the company could do it."

Moreover, the sources said the proposed issue could also help Infosys improve its visibility in the US market and attract talent, especially for its recently set-up consulting outfit.

With the rhetoric against outsourcing set to die down post-elections, Infosys could get aggressive on hiring in the US market, they said.

Infosys went in for a sponsored secondary ADR offering in July-August 2003 and offered 60 lakh ADS, representing 30 lakh equity shares. The total size of the offering was $294 million.

The Infy ADR, which normally trades at a premium of over 40 per cent to the Indian stock, has gained over 35 per cent since early August and touched $68.98 on November 4. However, in early trade on Friday, it was trading at $66.18, a drop of almost 4 per cent.

On the Bombay Stock Exchange, the stock closed at Rs 1976 on Friday, a gain of over 40 per cent since the company announced its first-quarter results.

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