Infosys and the Nasdaq-100: More than 15 minutes?

When the Nasdaq opens on Monday 18th December, Infosys Technologies Ltd., India's second-biggest IT services firm, will make history by becoming the first Indian company to enter the prestigious Nasdaq-100.

Infosys became the first Indian company to trade on the Nasdaq Stock Market in 1999. In May 2005, it raised $1.07 billion in the U.S. and Japan by selling 16 million American depositary receipts on behalf of local stockholders.

Infosys executives and directors, including CEO Nandan Nilekani, Chairman N.R. Narayana Murthy and Chief Operating Officer S. Gopalakrishnan sold 5.16 million shares in that offer, raising almost $346 million. Infosys previously sold $256 million of American depositary receipts in July 2003.

The move to enter the Nasdaq-100 will see Infosys convert as much as $1.5 billion of stock to 30 million American depositary receipts. Infosys is seeking to enter the Nasdaq-100 Index to attract funds tracking the U.S. benchmark index. The sale will increase the number of ADRs, currently valued at $51.66, to about 19% of Infosys' shares outstanding from 14%.

This is not the first time the spotlight has been on those entering – and exiting – the Nasdaq 100. As the dotcom bubble grew in 2000, companies that had their ’15 minutes of fame’ in the top 100 included Inktomi, 3Com, Palm and BroadVision.

And how about controversial pharmaceutical manufacturer ImClone, the company at the heart of the Martha Stewart insider trading case? It dropped out of the Nasdaq-100 in 2001 after it failed to get FDA approval for its drug research.

The Nasdaq-100 has always been a measure of which industry is making the biggest waves. A powerful indicator of trends, the Nasdaq-100 Index is composed of the 100 largest non-financial domestic and international stocks on the Nasdaq Stock Market. It was created in January 1985 when it was launched along with the Nasdaq Financial-100 Index, the 100 largest financial stocks on Nasdaq.

The Nasdaq-100 is re-ranked each year in December. All 100 securities in the Index are among the top eligible securities by market cap based on closing prices as of October 31, and the publicly reported total outstanding shares as of November 30.

On a cumulative price return basis, the Nasdaq-100 Index has risen over 1238.0% since inception, and it has outperformed several major domestic and international stock indexes for the ten-year period ended November 30, 2005.

For Infosys, the time is now to solidify its place as a major global stock and raise its profile internationally.

"This is one more step in our global journey," Nandan Nilekani, the chief executive officer of Infosys, told reporters in Mumbai.

But for India, Infosys’ entry into the US elite means much more, summarised by V. Balakrishnan, Infosys’ Chief Financial Officer, who said:

"This is significant for Infosys and the country. It shows India has come of age and the world is recognising India's growth.”

Infosys will join Nasdaq-100 veteran Level 3 Communications and newcomer Vertex Pharmaceuticals when the index is reshuffled next Monday.