Infosys conquers new peak
Infosys Technologies gained 2% to Rs 2,204, following a 3% surge in its ADR on Nasdaq on Monday.
The scrip reached Rs 2,218, a lifetime high. As many as 1.5 lakh shares changed hands in the counter on BSE.The stock has strengthened further after the company’s shareholders recently approved its sponsored ADR issue. From Rs 2,070.55 on 6 November, it rose 6.4% in a short while.
The key thing to watch out is the pricing of its sponsored ADR issue. Recently, the software major got shareholders’ nod for a sponsored ADR issue. The ADR issue is likely to be priced at a discount to the ruling ADR price to make the offer attractive to subscribers.
The sponsored ADR is an innovative way to reward local shareholders and improve liquidity on the Nasdaq, without actually diluting its equity. However, this time the secondary sponsored ADR offer of Infosys is not likely to be as hot for local investors as a similar offer by the company in mid-2005 simply because the premium that Infosys' ADRs command over the local shares has narrowed down to around 12.5%, compared with around 30% a few months ago.
The purpose to go in for another ADR issue is to increase float in the overseas market. With this issue, the overseas float of Infosys stock will increase 5%, pushing the total float to 19%, which is made up of 77.7 million shares. The increased float is expected to help Infosys to achieve its longstanding aim of getting into the famed Nasdaq 100 index, consisting of the 100 largest non-financial stocks listed on the Nasdaq.
At the time of announcing Q2 September 2006 results, Infosys revised upwards its EPS and revenue growth guidance for FY 2007 (year ending 31 March 2007). The company has forecast revenue between Rs 13,853 crore and Rs 13,899 crore for FY 2007, transforming into a projected year-on-year growth of 45.5 - 46%. EPS for FY 2007 is forecast at Rs 66, a projected year-on-year growth of 46.6%.
The current price of Rs 2,204, discounts its projected FY 2007 EPS of Rs 66, by a PE multiple of 33.3.
The scrip reached Rs 2,218, a lifetime high. As many as 1.5 lakh shares changed hands in the counter on BSE.The stock has strengthened further after the company’s shareholders recently approved its sponsored ADR issue. From Rs 2,070.55 on 6 November, it rose 6.4% in a short while.
The key thing to watch out is the pricing of its sponsored ADR issue. Recently, the software major got shareholders’ nod for a sponsored ADR issue. The ADR issue is likely to be priced at a discount to the ruling ADR price to make the offer attractive to subscribers.
The sponsored ADR is an innovative way to reward local shareholders and improve liquidity on the Nasdaq, without actually diluting its equity. However, this time the secondary sponsored ADR offer of Infosys is not likely to be as hot for local investors as a similar offer by the company in mid-2005 simply because the premium that Infosys' ADRs command over the local shares has narrowed down to around 12.5%, compared with around 30% a few months ago.
The purpose to go in for another ADR issue is to increase float in the overseas market. With this issue, the overseas float of Infosys stock will increase 5%, pushing the total float to 19%, which is made up of 77.7 million shares. The increased float is expected to help Infosys to achieve its longstanding aim of getting into the famed Nasdaq 100 index, consisting of the 100 largest non-financial stocks listed on the Nasdaq.
At the time of announcing Q2 September 2006 results, Infosys revised upwards its EPS and revenue growth guidance for FY 2007 (year ending 31 March 2007). The company has forecast revenue between Rs 13,853 crore and Rs 13,899 crore for FY 2007, transforming into a projected year-on-year growth of 45.5 - 46%. EPS for FY 2007 is forecast at Rs 66, a projected year-on-year growth of 46.6%.
The current price of Rs 2,204, discounts its projected FY 2007 EPS of Rs 66, by a PE multiple of 33.3.
posted by SY at 4:35 PM
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