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Infosys proposes 1:1 bonus issue

An extraordinary general meeting of the shareholders will be held on January 20, 1999, to seek approval for the proposed bonus issue.

A company statement said that the board felt the need to restructure the share capital in line with the capital employed in the business.

T O D A Y

• Season's grabbing • Infosys's bonus issue • Global's Rs 1 b bet • Landmark year

The board has proposed that the company capitalise a part of its reserves and issue bonus shares to existing shareholders in the ratio of 1:1.

After the bonus issue, the company's paid-up share capital is expected to increase from Rs 160.2 million to Rs 320.3 million.

N R Narayana Murthy, chairman, Infosys Technologies, has said capital restructuring is a continuous process at Infosys and the bonus issue has been proposed to align equity capital in line with capital employed in the business.

The price of Infosys scrip went through the roof on Wednesday after the company informed the stock exchanges that its board meeting would consider issuing bonus shares.

The scrip opened at Rs 3,015, touched a high of Rs 3,050 and later fell to Rs 2,890 to settle at Rs 2,945. On Tuesday when the scrip closed at Rs 2,973.75, there were over 20,000 buyers but not a single seller on NSE, brokers said.

Analysts expect the ex-bonus price to settle at around Rs 1,500, reflecting the normal trend in such cases.

Last month, Infosys said that its planned public offering of American depository receipts is unlikely to be brought into the market during calendar 1998.

Infosys has said that the timing of the issue will depend upon primary market conditions in the US.

Infosys has begun preparations for a public offering of ADRs in the US representing Infosys Ordinary Shares. The government of India has approved an offering representing shares with a total value of up to $75 million. It has also approved the creation of an ADR-based option plan for the company's employees.

Infosys posted a total income of Rs 2.18 billion for the half year ended September 30, 1998.

- Compiled from the Indian media

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