Infy ADR quotes at 74% premium

The gain in Infosys share in the domestic market was lesser as it closed at Rs 7,139 gaining 94.85 per cent on the Bombay Stock Exchange forthe same period. “The Infosys ADR is quoting at a huge premium when compared to the domestic share. This is intruiging,” said a fund manager.

According to Skindia Finance, for the past few weeks Infosys has been the front-runner on both the domestic as well as the ADR markets.

Ever since Infosys ADR was issued on March 11 at $ 34, it has been quoting at a premium. Till June end although the ADR was quoting at $ 58.38, by July 16 it touched $ 111 and after swinging between $ 73.75 (July 21) and $ 100.94 (September 1), it zoomed to $ 138.25 on September 21.

The domestic markets too followed the trend on Nasdaq and the shares of Infosys skyrocketted to Rs 7869, its all time high of September 23. But the rally could not sustain for long. The rumour that the company was about to announce a 5 for 1 stock split (converting every 10 equity share in 5 share with a face value of Rs 2) brought the share price down to Rs 7023.85 on Monday. However, later in the day rumour was denied by the company through a pressrelease.

Infosys finally closed at all time high of $ 142.50 on September 30 gaining 146.75 per cent in the second quarter on Nasdaq while it closed at Rs 7139 gaining 94.85 per cent on BSE for the same period. With Infosys ADR touching a record high on the Nasdaq and the domestic scrip price retreating after an initial flare-up, market players expect some firework on this counter next week. This scrip alone, according to one BSE broker, can hold the market at higher levels. The market capitalisation of the scrip is currently around Rs 25,000 crore.

Said a broker, “good software companies will continue to get good valuation in India and abroad. Infosys is one of them.” The Indian software industry has consistently grown by over 50 per cent every year. With the exports contributing Rs 17,200 crore, the total revenue of the software industry would be Rs 24,500 crore for the current financial year.

Infosys net profit is forecast to soar 84.1 per cent to Rs 249 crore in 1999-2000 (April-March). Its salesin the year to March 31, 2000, is projected to rise 66.1 per cent to Rs 845 crore.