INFY has the Government approval for $ 2 billion buying opportunity! Watch out for CATP!
Tuesday April 11, 1:01 pm Eastern Time
Infosys says can spend up to $2 bln on acquisition
BANGALORE, India, April 11 (Reuters) - Indian computer software leader Infosys Technologies Ltd (NasdaqNM:INFY - news) has received government approval to spend up to $2 billion to acquire a company overseas but has yet to identify a target, its chairman and chief executive officer said on Tuesday.
``As you know at this point of time, we do have a very clear approval of (to spend) two billion dollars today without having to refer to any authority,' Murthy said in reply to a question during a telphone conference with investors.
``But at this point of time, we have not finalised anything,' Murthy said after Infosys unveiled a stellar financial performance during 1999/2000 (April-March).
``However if we need to acquire a company which has a market cap higher than that ($2 billion) or is valued higher than that, all that we need to do is to approach the government of India.'
Nasdaq-listed Infosys beat analyst expectations to post a 117 percent jump in profits to 2.94 billion rupees ($67.40 million) from 1.35 billion in the previous year.
Total income rose 80 percent to 9.21 billion rupees, boosted by a 74 percent surge in export income.
Infosys's shares vaulted eight percent to close limit up at 10,625.90 on the Bombay Stock Exchange (BSE) as investors cheered the results and news of the firm's increasing thrust into the booming e-commerce area.
But Infosys shares on the Nasdaq market were trading down by 32\13 at 209 at 8.10 p.m. (1440 GMT).
Replying to another question, Murthy said that Infosys would use either pursue a stock-swap or a cash-deal depending on the specific circumstances of the acquisition.
Infosys had in February said that it had sought a blanket approval from the Reserve Bank of India for overseas acquisitions but had not mentioned the amount it intended to spend.
The government issued a statement in March saying that the funding of overseas investment through ADR/GDR realisations up to a maximum of 50 percent of such realisations would be without any value limits.
The government also decided to provide a second window to Indian corporates in knowledge based sectors, allowing them to acquire businesses abroad through the ADR/GDR stock swap and under the automatic route up to 10 ten times the export earning of the investing company during the preceeding year.
($1=43.60 Indian rupees) |
