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Infosys Ltd. Message Board

  • amy_beat_my_father amy_beat_my_father May 27, 1999 3:54 PM Flag

    Some Big Time Dilution Coming Read On..

    Infosys to issue 33 lakh shares under fresh
    employee stock option
    Press Trust of India

    -----------------------------------------------------------

    New Delhi, May 26: Infosys Technologies Ltd
    is considering another round of employee stock
    option plan (ESOP) in order to attract and retain its
    manpower.
    As part of the plan, the company intends to offer 33
    lakh shares to its employees under 1999 option plan
    and would seek its shareholders approval at the next
    annual general meeting on June 12.

    Each option
    granted shall entitle an eligible employee to apply for
    one equity share of ****Rs 10***** each at a fair
    market price determined by company's board and
    guidelines of Securities and Exchange Board of India (Sebi),
    company's annual report for 1998-99 said.

    Currently,
    each Rs 10 share of ITL is traded at around Rs 3,200,
    both on National Stock Exchange (NSE) and Bombay Stock
    Exchange (BSE).

    The company's move to offer another
    plan follows Sebi in March this year announcing new
    regulatory framework for ESOP.

    ITL last year had also
    approved an ESOP up to eight lakh equity shares to its
    employess both in India and overseas under 1998
    plan.

    Under this plan,the company early this year issued 2.13
    lakh options equivalent to 1.065 lakh shares
    represented by American Depository Receipts
    (ADR).

    Each option was granted at $34 (Rs 1,462) and two ADRs
    were equivalent to one share. The ESOP offer was
    besides the company offering its shares in US markets and
    listing the shares on American stock exchange
    "Nasdaq".

    This is the third ESOP proposal offfered by Infosys to
    its employees. The first offer by the company was in
    1994, which provided for issuance of 30 lakh warrants
    (adjusted for bonus issues) to its employees.

    These
    warrants were issued to an employee welfare trust at Re 1
    each and the trust purchased these warrants from the
    loan proceeds by ITL.

    Each warrant entitled the
    holder to purchase one share of the company for Rs 100.
    All these warrants were exercised by the trust in
    1997 in anticipation of a bonus issue and then
    converted into shares.

    Following the conversion, the
    trust issued 15.05 lakh shares to ITL employees and the
    rest were issued to thetrust for future
    issuance.

    ITL which came out with its Initial Public Offer
    (IPO) in February 1993 at a price of Rs 95 per share
    has been rewarding its shareholders regularly with
    dividend and bonus shares.

    After the IPO, the
    company has annouced three bonus issues, each in the
    ratio of one share for every share held. An investor
    who had purchased 100 shares through IPO without
    selling them till date will be holding 800 shares worth
    Rs 25.6 lakh (at current market price of Rs 3,200
    per share).

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • If you read the para properly you will not be
      inserting stars in it. The shares are given to the
      employees at fair market price and not at Rs.10. The face
      value of the share is Rs.10.

      Each option granted
      shall entitle an eligible employee to apply for one
      equity share of ****Rs 10***** each at a fair market
      price determined by company's board and guidelines of
      Securities and Exchange Board of India (Sebi), company's
      annual report for 1998-99 said.

 
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