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Presented By:Riddhi Agarwal 102
Huma 119
Sneha Karve 127
Why Indian companies list Off shore?Poor market design of the equity market in India
Restrictions on equity ownership by foreign investors
FIIs face restrictions of ceilings or stakes in Indian companies
Need to raise capital
The United States security markets are richest source of capital in the world
Mergers with U.S. businesses
Advantages of Indian Companies Listing Offshore
Listing on a US exchange can provide a foreign issuer with numerous advantages
Local Exchange Risks
AcquisitionCurrency
Illiquid Bourses
Better Valuation
Poor Settlement/ Clearing
Currency Exposure for Non-Local Investors
Stronger Investor Base
Presence of most sophisticated global institutional investors
Access to QIB Investors
World-Class Markets
Strong Overall Liquidity
Quick Clearing/ Settlement Period
Global Profile
Extended Research Coverage
High Prestige
Access to US Retail Investor Base
More Transparent Trading
Maximize Shareholder Value
Which Indian companies are listed abroad?Infosys Technologies was the first Indian
company to be listed on Nasdaq in 1999.
The first Indian firm to issue sponsored GDR or ADR was Reliance industries Limited
Introduction to Depository Receipt created in 1927 .A unique opportunity for companies looking to
tap a new investor base, expand awareness, or raise capital
Make investing in a company beyond the investor’s home borders easy and convenient
What is a Depository ReceiptA negotiable instrument issued by a
depositary bank evidencing ownership of shares in a overseas corporation
Mean both the physical certificate and the security itself
Frequently identified by the markets in which they are available
Why Investors Buy DRsConvenience
Simplification of Trading & settlement
Lower trading & Custody Cost
Minimize foreign exchange problems
Types of Depository Receipts
Importance of a DR ProgramPrivatization
Merger & Acquisition
What are American Depository Receipt (ADRs)DRs that are publicly available to investors in
the US
ADRs are dollar-denominated securities that trade, clear and settle like any other US security
Benefits of ADRs
Capital Raised using ADRs
Source: www.adr.com
ADR Trading Volume: Exchange Listed ADRs
ADR Structure
Unsponsored ADRTwo party contract
Depository has no obligation on ADR holder
Trade on the OTC market
No regulatory reporting requirements & no
registration with SEC
Issued in accordance with market demand
Each depositary handles only the shares it has
issued
ADR Program Description
Source: JP Morgan Depository Receipt Reference Guide
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Sponsored ADR – Level ITrade in the Over-the-Counter (OTC) market
and are not listed on an exchange
Certain amount of control by issuer
Maintain Home market accounting and disclosure standards
New DRs are created by issuing and canceling ordinary shares in the issuer’s home market
Registered with the US Securities and Exchange Commission
19
Advantages of Level INo SEC financial disclosure
Same financial information & disclosure as home market
Lowest cost to enter market
Simple to execute
20
Disadvantages of Level ILimited visibility in US as it trades in OTC market
Not listed in NYSE, AMEX, NASDAQ
Cannot be used to offer public equity capital in the US
21
Disclosures
SEC registration Form F – 6
Exemption under Rule 12g 3-2(b)
22
Pink Sheet
Source: www.pinksheet.com
23
Sponsored ADR – Level IIListing on one of the U.S. national exchanges
Must register under the SEC & must comply with the individual exchange’s requirements
Increased information in hands of retail investors
Financial Statement & Reporting in US GAAP
Uses existing shares to satisfy investor demand and liquidity
24
Advantages of Level II Reaches a broader universe
Arbitrage opportunity
Provides higher visibility
Greater opportunity to diversify issuer’s US investor base
Enhances company’s status & profile
Provide “Currency” for US Mergers & Acquisitions
25
Disadvantages of Level II
Substantial disclosures to SEC in accordance to US laws & US GAAP
SEC regulations do not permit a public offering of ADRs under a Level II program
Many legal, accounting & corporate obligations to fulfill
26
Disclosures
Form F – 6
Form 20 - F
Form 20 - FForm F – 6
27
Sponsored ADR – Level IIIPublic offering
Full reconciliation of financial statements
Must selects an investment bank to advise on and underwrite the offering and to market the DRs to US investors
28
Advantages of Level III
All advantages of level 2 & allows raising of capital
Highest measure of visibility & publicity
29
Disadvantages of Level IIISubstantial disclosures to SEC in accordance to
US laws & US GAAP
The costs of setting up and maintaining a Level III program can be high.
Many legal, accounting & corporate obligations to fulfill
30
Disclosures
Form F – 6
Form 20 - F
Form F – 1
31
Restricted ADR – Rule 144APrivate Placement
Greatly increases the liquidity
Rule 1444A enables:-
No SEC registration
Certain financial disclosures reqd but that too
exempted under Rule 12g3-2(b)
Trading of RADRs is facilitated by PORTAL
32
Advantages of Rule 144A
No registration
Cost to raise capital minimal
Time required to complete private placement is less than with a registered offering
33
Disadvantages of Rule 144AIssuer prohibited from any type of promotion
of the program in U.S. media
Market not very liquid
Cannot be created from classes of shares already listed
34
Approval Required for Issue of DRsApproval as per Companies Act
Approval as per Ministry of Finance / RBI
Approval by Stock Exchange
35
As per Companies Act
The Company should pass a Board resolution for taking a decision for issue of ADR/GDR
The Company has to get permission from its shareholder for the issue
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As per Ministry of Finance / RBIADR/GDR issue shall be treated as FDIThere is no monetary limit upto which an Indian
company can raise ADRs /GDR
Aggregate Foreign Investment would need to conform to existing FDI Policy
Issue Related Expenses4% in the case of GDR’s7% in the case of ADR’s2% in case of Private Placement
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As per Ministry of Finance / RBI Furnishing of Information
Within 30 days of completion of transaction company would furnish following to Exchange Control Department of the RBI Amount raised through ADR’s / GDR’s Number of ADR’s / GDR’s issued Underlying shares offered % of foreign equity level in the Indian Company on
account of issue of ADR’s/GDR’s Details of repatriation, etc.
The company should also furnish a quarterly return in the form enclosed in Annex-9, to Reserve Bank within 15 days of the close of the calendar quarter.
38
As per Stock Exchange
Indian companies first required to list equity share in recognized Indian stock exchanges, and then in overseas exchange
Approval before Issue and allotmentFinal Listing and Trading approval after
allotmentAllotment and upload of Credit to Domestic
Custodian
39
Risk Associated
Political Risk
Exchange Rate Risk
Inflationary Risk
40
What are Global Depository Receipt (GDRs)
Raise capital simultaneously in two markets
Used to capture markets outside the US
41
Major Indian Companies On The Euro Exchanges
42
GDR Structures
Regulation S
Bifurcated StructureUnitary Structure
43
Advantages of GDRCan be Private / Public offering
Access to a global investor base
Overcome local selling restrictions to foreign share ownership
Settlement through Clearstream, Euroclear and DTC
44
Disadvantages of GDR
If the US tranche of a GDR is structured as a Rule 144(a) private placement, the disadvantages of an RADR program will apply. If it is structured as a Level III program, the reporting and cost features of such programs will apply
45
Regulation SRaise capital outside US
Listed in London or Luxembourg
Can be paired with ADR program
Regulation SPurpose/description
Also referred to as Reg S GDR.
Shares are not and will not be registered with
any United States securities regulation
authority.
Regulation S shares cannot be held or traded
by any “U.S. Person” as defined by SEC
Regulation S rules.
The shares are registered and issued to
offshore, non-US residents.
Trading
Generally, these ADRs tend to be listed on the London or Luxembourg stock exchanges.
Regulation and disclosure
Issuers of Reg S ADRs must comply with the regulations of the markets where they are issued.
These securities are not subject to SEC registration requirements.
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Exchange RequirementsNo listing in the US, but many are listed in
London or Luxembourg
Governed by the European Union directive
49
ADR Vs GDRADR
1. Listed on American Stock exchange
2. Stringent Accounting Requirements under U.S GAAP
3. ADR listing allows the famed American retail investors to take-part in the offering
4. Leads to wider interest and better valuations of a company’s stock, thus enhancing shareholder value.
5. Also, the Indian company can acquire US companies against issue of shares.
GDR1. Listed on stock exchange
outside America2. Not so stringent
Accounting Requirements
3. The GDR market is mainly an institutional market.
4. The GDR market has lower liquidity
5. The Indian Company may/may not be allowed to acquire the foreign Co.
Setting the RatioDetermining the ratio of underlying shares to
Depositary Shares (DSs)
DSs are established as a multiple or fraction of the underlying shares and the ratio can influence the price trading range
Point for Consideration: - Industry peers
Exchange options- Investor Appeal
50
Setting the Ratio (Contd…)
Example: Satyam Computer Services Ltd.15 Million ADRs = 30 Million local sharesTherefore, the ratio is:1:2 of ADRs to Local shares
There is no “correct” ratio for DRs
51
Average Share Price by Industry
52Source: Citibank Depository Receipt Reference Guide
Factors for Determining Price
Ratio Determination
Supply & Demand
53
PRICING OF THE ISSUE Current regulations- companies have to
price their issue at the higher point of the preceding six months' average price or last 15 days' average price before the issue.
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There is another simplification in the works. Under the existing norms, both the averages — six months and 15 days — are calculated from one month prior to the date on which the company’s shareholders decide to consider the issue. This norm is designed to ensure that there is no price manipulation by the issuer in the domestic market.
55
Pricing of AdrCorporates raising equity capital overseas
may soon get more flexibility in pricing their Americ Depository Receipts (ADRs) and Global Depository Receipts (GDRs). The move comes after corporate houses complained that under the existing pricing norms, their offerings may not find many takers in the current bearish market.
56
The finance ministry has proposed to shorten the period of trading used to compute the price at which equity shares could be issued in global markets.
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The ministry also wants to remove this requirement that the closing prices should be calculated one month before shareholders decide to raise capital abroad. In future, closing prices up to the date on which the shareholders decide on the issuance could be considered. This would make the price more realistic, closer to current price.
58
SEC RegulationsSEC was created as an independent agency of
the U.S. government to enforce federal securities laws
Protects U.S. investors
Empowered to issue regulations and enforce provisions
59
The Securities Act of 1933 Under this act, securities have to be
registered.
Financial Statement
Compensation
Related Party Transactions
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The Securities Exchange Act of 1934 Under this act reports have to be filed for
financial disclosures.
Financial Statement
Compensation
Related Party Transactions
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The Registration Process: Filing with the SEC File Form F-1 registration statement with
SEC (Form F-2, F-3 also available under special circumstances which are more flexible and abbreviated)
The primary component of any registration statement is the Prospectus (commonly called the “red herring”), which must be delivered to each investor that purchases securities in the offering
The prospectus describes the business and management, risk factors and audited financial statements amongst other things
SEC staff reviews and comments on the disclosure (but does not approve/disapprove)
File amendments to Registration Statement; pay required fee
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Example of a Prospectus
Become “Effective”
The ADR Value Chain Process
63
Due DiligenceDue DiligenceDocumentationDocumentation
SyndicationSyndication
Pre-marketing
Pre-marketing
RoadshowRoadshow
BookbuildingBookbuilding
Pricing and Allocation
Pricing and Allocation
After-market Support
After-market Support
Successful Offering Process
Successful Offering Process
ValuationValuation
Due Diligence
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Understand the issuer’s business in
detail
Identify potential risks that investors should be aware of
Obtain information to draft the Prospectus
Objectives
Key Documentation
65
Registration Statement(Form F-1)
Prospectus
Underwriting Agreement
Filed pursuant to US Securities Act of 1933 with the US SEC
Contains the Prospectus and certain information about the issuer and securities being offered
A marketing and disclosure document that covers the terms and conditions of the securities, the marketing of the securities and plan of distribution
Contains description of the issuer, its business, management and financial statements
The minimum required information contained in the prospectus is governed by the US Securities Act
An agreement among the lead underwriter (acting on behalf of itself and the other underwriters in the syndicate) the issuer and the selling shareholder
Contains terms and conditions under which the underwriters will purchase and reoffer the securities
Key Documentation (Contd..)
66
Legal Opinions
Auditor’s Comfort Letter
Listing Application and Listing Agreement
A confirmation from legal counsel to the underwriters on the legality and validity of certain agreements and other documents
Provides comfort on the accuracy of information in the registration statement and the prospectus
Issued by independent auditors to the underwriters and directors of the issuer which covers the following
Conformity of financial information contained in the Registration Statement and prospectus to US GAAP
Absence of any material and adverse changes since the date of the financial statements
Performance of special procedure to ensure consistency between the reported financial statements and the internal accounting/financial records
An application to be submitted to the exchange to list the securities
An agreement between the exchange and the issuer which set-forth the issuer’s obligations after the securities have been accepted for listing
Key Documentation (Contd..)
67
Form 8-A
Deposit Agreement
(for depositary shares)
Form F-6 (for depositary
shares)
A document to be filed pursuant to the US Securities Exchange Act of 1934 with the SEC so that the securities can be listed on the exchange
An agreement outlining the terms under which the depository holds the shares issued by a foreign corporation and against which the depository issues ADRs to investors
A short document to be filed pursuant to the Securities Act with the SEC to register ADRs
Contains Deposit Agreement as an exhibit
ValuationThe objective of the discussion is to agree
on a price range that will be used during the marketing period
Various valuation techniques are used to help determine the IPO price range depending on industry
Financial models are built based on information learned during the due diligence period
68
Syndication Syndication forms an integral part of the selling effort of an IPO
An effective syndicate, which consists of a strong group of underwriters, would motivate performance and maximize aftermarket support
69
An Effective SyndicateAn Effective Syndicate
Motivate participants
and maximize demand
Optimize the sustainable offer price
Facilitate orderly
marketing
Effectively communicate
the investment
“story”
Attract key “anchor” investors
Pre - Marketing
70
• Introduce the offering to investors
• Address key investor concerns
• Provide invaluable intelligence on the current market sentiment
• Familiarize investors with the investment “story”
• Gauge current investors’ appetite towards the shares
• Key investors would be contacted by research analysts and salesforce
• Research analysts meet with key institutional accounts to present the company’s compelling investment story and establish pricing parameters
• Salesforce collect feedback and indications of interest from targeted investors
• Determine target investors for roadshow one-on-ones
• Introduce the offering to investors
• Address key investor concerns
• Provide invaluable intelligence on the current market sentiment
• Familiarize investors with the investment “story”
• Gauge current investors’ appetite towards the shares
• Key investors would be contacted by research analysts and salesforce
• Research analysts meet with key institutional accounts to present the company’s compelling investment story and establish pricing parameters
• Salesforce collect feedback and indications of interest from targeted investors
• Determine target investors for roadshow one-on-ones
Roadshow
Bookbuilding
Pricing / Allocation
Pre-MarketingObjectives
Process
RoadShow
71
• An optimum forum for the company’s senior management and underwriters to communicate effectively the investment “story” and address investor concerns
• Generate maximum demand from investors to help create pricing leverage
• Begins soon after the preliminary offering circulars have been distributed
• A series of group presentations to potential institutional investors
• One-on-one meetings with key “anchor” accounts
• An optimum forum for the company’s senior management and underwriters to communicate effectively the investment “story” and address investor concerns
• Generate maximum demand from investors to help create pricing leverage
• Begins soon after the preliminary offering circulars have been distributed
• A series of group presentations to potential institutional investors
• One-on-one meetings with key “anchor” accounts
Bookbuilding
Pricing / Allocation
Pre-MarketingObjectives
Process
Roadshow
Book Building
72
• Build a “book” that indicates the demand for the offering at different price levels in order to determine an optimal pricing level for the offering
• Create competition between investors both individual and institutional in order to maximize the offering
• Begins during the pre-marketing period and accelerates towards the end of roadshow
• Establish price talk
• Investors submit indications of interest
• Analysis of demand curve at various price levels
• Build a “book” that indicates the demand for the offering at different price levels in order to determine an optimal pricing level for the offering
• Create competition between investors both individual and institutional in order to maximize the offering
• Begins during the pre-marketing period and accelerates towards the end of roadshow
• Establish price talk
• Investors submit indications of interest
• Analysis of demand curve at various price levels
Pricing / Allocation
Pre-MarketingObjectives
Process
Roadshow
Bookbuilding
Pricing / Allocation
73
• Maximize proceeds
• Building quality investor base
• Achieve a reasonable aftermarket premium that can be sustained over the immediate term
• A careful analysis of the quality of the orders would be conducted
• Identify investors who are critical to the transaction
• The ultimate price level would be set at a level where it seeks to maximize proceeds while ensuring appropriate investor allocations and a healthy aftermarket
• Maximize proceeds
• Building quality investor base
• Achieve a reasonable aftermarket premium that can be sustained over the immediate term
• A careful analysis of the quality of the orders would be conducted
• Identify investors who are critical to the transaction
• The ultimate price level would be set at a level where it seeks to maximize proceeds while ensuring appropriate investor allocations and a healthy aftermarket
Pre-MarketingObjectives
Process
Roadshow
Bookbuilding
Pricing / Allocation
After Market Support – Underwriters
Aftermarket stabilizationProvide liquidity as necessary to create an
orderly aftermarket
Commit trading capitalManage over-allotment option by Green shoe
option.
Support investor relationsDispatch accurate information and management
assessment of the macro environment, the industry, company performance and business strategy on a regular basis
74
Ways to Buy ADRs
Traditional Brokers
On – line Brokers
Direct Investment plans
75
Buying ADRsTwo ways of buying shares
in home country in foreign country
The broker may either purchase existing DRs or, if none are available, he may arrange for a depositary bank to issue new ones
76
Selling ADRsSell a DR in the market in which it trades
Cancel the DR and sell the ordinary share in its home market
77
Issuance of ADRs
78
Cancellation of ADRs
79
Liquidity TradingThe consistent breadth and depth of U.S.
exchange trading activityEstablished through a strong investor
relations effortADR’s liquidity generally is comparable to the
liquidity of underlying shares in the issuer’s home market
The ADR float constantly fluctuates in response to investor demand
80
Roles & Relationship In a ADR Program
81
Key Roles in Establishment of ADR Program
Roles & Relationship In a ADR Program
82
Key Roles in Ongoing Development of ADR Program
Additional Roles
Investor Relations Firm
DTC
83
Indian ADR Snapshot
84Source: Bank of New York (www.adrbny.com)
Indian ADR PremiumPremium = Ordinary share price in Rs.
– Price of DR in US$
Advantage of Limited two-way market promotes cross border liquidity up to a point, but does not significantly reduce the size of the DR premium compared to a one-way market
85
Indian ADR Premium (Contd…)The various possible sources of the premium :
- Legal / Institutional - Liquidity- Risk Preference
86
Indian ADR Premium FallingReason for higher premium
Trust in Indian growth storyInvestors uncomfortable in investing directly
US Dollar faltered in recent quarters whereas Indian economy continued its momentum
Benefits in Indian Rupee appreciationUS market have been underperforming
compared to Indian markets & hence the premiums dropped
87
Topics Covered –FungibilityArbitrageHeadroomProcess FlowRegulatory FrameworkSarbanes Oxley Act 2002Case Study-Infosys
88
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One Way FungibilityConversion of depository receipts into local shares
The ADRs/GDRs converted into domestic shares are redeemed by the depository
A fresh issue of ADRs/GDRs could reinstate that loss of liquidity
Price volatility
Liquidity problem
90
Two Way FungibilityConversion of depository receipts into local shares and vice
versa
It is the conversion of the already converted ADR/GDR stock back to depository receipts
It is subject to availability of Headroom. India follows ‘Limited Two Way Fungibility’
Re-issue is permitted to the extent of ADRs/GDRs that have been redeemed
91
Two Way Fungibility
Forward Fungibility &
Reverse Fungibility
Benefits of Two Way Fungibility to Issuer
The issuer can have the following benefits;Ability to increase the number of outstanding
depository receipts to the original amountIncreased liquidity in the international investor
market due to more number of depository receipts available
Increased stock price of the depository receipts due to increase in demand
More flexibility in acquiring companies overseas, as the stock component can be increased in a cash and stock deal, thereby saving precious foreign exchange.
92
Benefits of Two Way Fungibility to InvestorNon residents can avail of the tax benefits under
Section 115 AC of the Income Tax Act 1961 which is applicable to non resident investors in ADRs / GDRs offered against issue of fresh underlying shares. The same benefits will now be available to investors in ADRs / GDRs against existing equity shares.
Higher float available on the DR stock and hence better liquidity.
93
Dual FungibilityDR’s can be issued as investor demand increases in the
international market and can be Re-converted as demand is greater in the home market. Both should be done only when arbit
Example – Say ADR/GDR is traded in the international market at Rs. 1000. The local share is traded in domestic market say Rs.1300. Then there is an arbitrage opportunity and a profit of Rs.300 can be earned in the domestic market of the local share. If once again the ADR/GDR prices rise in the global market, then the local share can be Re-converted into ADRs/GDRs.
94
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Arbitrage Strategy1. Buy DR2. Sell local stock in India in futures market3. Convert shares from DR to local4. Deliver shares to stock exchange in India5. Deposit proceeds in Indian bank account6. Repatriate funds7. Repeat process
96
Arbitrage Strategy (Contd…)If ADR/GDR is at Premium
Go short in International MarketGo long in Local Futures
If ADR/GDR is at DiscountGo short in Local FuturesGo long in International Market
97
HeadRoomHead Room is the extent to which Depository
Receipts can be issued under Two Way Fungibility with respect to the specific company
Head Room = Number of ADRs/GDRs originally issued - Number of ADRs/GDRs outstanding further adjusted for ADRs/GDRs redeemed into underlying shares and registered in the name of the non-resident investors
Head RoomThere is a crucial difference in ADR provisions of India
and other countries like Germany, Hong Kong, South Korea etc.
In India ADR’s have ‘Limited Two Way Fungibility’ .If Headroom is not available and ADR is trading at a
premium then no possibility of Arbitrage opprtunity.It is difficult to obtain the accurate information about
headroom availability in terms of current and historical data.
There can be a situation where Headroom is not available but ADR is trading at a premium…Then what are the factors responsible for higher ADR price?
99
Head Room (Contd…)IllustrationOriginal Issuance ( Incl Corporate Actions ) 15
mn DRsCancellations 5 mn DRsOutstanding 10 mn DRsCancelled but shares not sold 1 mn DRs
Head Room = 15-10-1 = 4 mn DRs
* The same is however subject to the Sectoral Cap applicable to the Company
100
Process Flow-Trading & Settlement
Non Resident Investor
DomesticBroker
Domestic Custodian
Earmarks against the available Headroom
Broker buys shares
Overseas Depository
1 23
4
56 7
101
Taxation Issues
The tax provision u/s 115 AC applicable to non-resident investors for ADR/GDR offering against issue of fresh underlying shares
• Resident shareholders divesting their holdings will be subject to Capital Gains tax provisions
102
ADR Certificate Specimen
103
104
Case Study: Infosys Technologies Ltd. And Now….
Who could have backed this group 25 years back?
105
Infosys lead the way in many areasFY 1995 – First company to adopt US GAAP reportingFY 1999 – First company to list in an overseas stock
exchange FY 2004 – First company to sponsor a secondary ADR
offeringFY 2006 – Largest ever international offering of over
US $1 billion by an Indian company FY 2006 – First Indian company to issue a Public Offer
Without Listing (POWL) in Japan
106
Infosys ADSs IPO
Listed on the NASDAQ on 11th March 1999
Issue size = 10,35,000 ADS (20,70,000 Local shares)
Shares issued is ratio of 2:1
Share Price = US$ 34
Capital raised = US$ 70 million
Market Capitalization = US $ 1 billion
107
Advantages of IPO
ESOPs
Mergers & Acquisition
Enhance its image
108
109
What it means?Conversion of existing domestic equity shares
into ADRsAllows shareholders in India to convert and
sell their equity shares in the US market and realize the proceeds, net of issue expenses
There will be no additional issue of any equity shares by the company
No money will accrue to the company out of this issue
110
1st Sponsored Secondary ADR Program
Announced in December 2002 and concluded in July 2003
ADR Size = 4-6 mn equity shares (equivalent to 12 mn ADRs now)
ADRs price = US$ 49/ADR on July 31, 2003Gross proceeds = US$ 294 mnNet issue expense = 3.98% of the gross proceedsThe proceeds, net of issue expenses, were
disbursed to the shareholders on August 21, 2003
111
2nd Sponsored Secondary ADR Program
Announced in November 2004 and concluded in June 2005
ADR Size = 16 mn equity shares ADRs price = US$ 67/ADSGross proceeds = US$ 1.07 billionNet issue expense = 3.98% of the gross
proceedsThe proceeds, net of issue
expenses, were disbursed to the shareholders on July 2005
112
3rd Sponsored Secondary ADR Program
Announced in November 2006 and concluded in May 2007
ADR Size = 30 mn equity shares ADRs price = US$ 53.50/ADSGross proceeds = US$ 1.6 billionNet issue expense = 3.98% of the gross
proceedsThe proceeds, net of issue expenses, were
disbursed to the shareholders on June 2007Got listed on the NASDAQ-100 Index
113
The Process…..File offer documents with SECGet comments from the SEC, if any and
complete the Registration Statement filing and process
Create an escrow mechanism for shareholders to deposit their shares in India
Send the letter of invitation to all the shareholders in India
Fix a specified date to identify eligibility of shareholders who can participate in this secondary offering
114
The Process….Road show to market the ADRsPrice the ADRsEligibility is pro-rata to the holdings of the
shareholdersExcess shares offered in the escrow account
will be returned to the shareholdersThe proceeds are repatriated to India and will
be distributed to the shareholders, net of issue expenses
115
Post ADR
116
Financial Highlights – US GAAP
(In US$ million) 2007-08 2006-07
Revenues 4176 3090
Gross Profit 1723 1313
Operating Income 1151 852
Net Income 1155 850
117
Infosys ADS Premium
Source: Infosys Technologies Annual Report 2006 - 2007
ADS Premium is calculated based on BSE & ADS closing prices as on the end of each month.
118
Infosys – Market Data
Source: www.adr.com
Currency USD
Open 23.25
Previous Close 25.02
Today's Range 25.42 - 22.80
Avg Daily Volume 3,337,897
Exchange Nasdaq National
Market
Market Cap ($MM) 14,494
52 Week Range 55.80 - 22.80
% Change YTD -47.29
PE (Trailing) 14.94
EPS (Last Fiscal Year) 1.98
Type ADR
Last: 23.91 Net Change: -1.11 % Change: -4.44% Volume: 7,625,693
As on 10th Oct 08
119
Infosys - Security Information
Underlying
Exchange MUMBAI
Ticker INFO
Sedol 6205122
ISIN INE009A01021
Source: www.adr.com
ADR
Exchange NASDAQ
Ticker INFY
Cusip 456788108
Sedol 2398822
Ratio (A:O) 1 : 1
Depositary DB
Custodian
120
Time not ripe to export our Capital Market !!!
121
THANK YOU
