1/28/99 article. India Infosys eyes Nasdaq listing
By Reuters
Special to CNET News.com
January 28, 1999, 7:15 a.m. PT
Indian computer software and services company
Infosys Technologies said today that it was ready to
become the first Indian firm to list on Nasdaq, but
was waiting for the right time.
"We are waiting for the markets to improve. Everything is
ready on our side," Infosys CEO N.R. Narayana Murthy
told Reuters at an international software conference.
"Our desire is to do it [the listing] as early as possible.
Whether it is going to be next month, next quarter, or two
quarters down the line, it is difficult for me to say," he
added.
Infosys, encouraged by booming exports of software and
services and skyrocketing technology stock prices, plans
to raise as much as $125 million from an initial public
offering in the United States through an offering of
American Depositary Receipts (ADRs).
In the process, it will become the first Indian firm to list on
Nasdaq. Analysts expect at least two more Indian
technology firms to follow Infosys to U.S. stock exchanges
in 1999.
Narayana Murthy said the U.S. listing would help Infosys
raise funds to start out on the road to become a global
company.
"It is very important to list on global exchanges to attract
high-quality manpower from the local market. Microsoft
has 34 percent of its equity subscribed to stock options.
About $50 million of the funds raised from ADRs would be
for employee stock options," he said.
He said the IPO would also fund the requirements of
Infosys to replicate the systems and infrastructure of its
international clients in India. It could also eventually fund
acquisitions overseas.
"As corporations grow and move towards the offshore
software model, it becomes more expensive for us to
replicate their systems and infrastructure in India. We
spend $14,120 per new employee at present, and once the
capital requirements become larger, I don't think India can
meet that requirement," he said.
Infosys hires between 800 and 900 new employees each
year.
Speaking of expected revenue growth, Narayana Murthy
said he expected the company to grow at the same rate
as the industry as a whole over the next several years.
"I expect the industry to grow at between 35 to 40 percent
over the next several years. We are a conservative
company, and we expect to grow at industry compatible
growth rates," he said.
The firm's net profit in the nine months to December 31,
1998 more than doubled from the same period in 1997,
reaching $22 million.
Sales in April-December 1998 shot up to 3.6 billion rupees
from 1.8 billion rupees in April-December 1997.
Narayana Murthy said most of Infosys's growth would
continue to come from the development of customised
software, but the firm was stepping into Internet and
intranet applications, enterprise resource planning
software, electronic commerce, and euro conversion
software.
He said the firm did not need to be in software products to
sustain high growth.
"We don't need to be in the product market. The world
market for software services is between $25 billion to $30
billion each year. India is just some 10 percent of that, so
there is tremendous opportunity for growth."
India's software exports in 1997/98 (April-March) stood at
$1.75 billion. The National Association for Software and
Services Companies, the apex body for India's software
industry, expects exports in 1998/99 to touch $2.7 billion.
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