Will you tender your Infy shares?

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The sponsored ADR for Infosys starts on the November 9 and it is time for people to decide whether they want to tender all sum of their Infosys holding.

Harit Shah of Angel Broking gives an analyst's perspective about the ramifications of this sponsered ADR. Three HNI investors, Sandeep Madan, Mukesh Patel and RC Purohit, investors in Infosys, give their views on the same.

Excerpts from CNBC-TV18's exclusive interview with Harit Shah, Sandeep Madan, Mukesh Patel, RC Purohit:

Q: Have you devised your strategy on what you want to do with this sponsored ADR offer?

Madan: I have thought about it in two different terms; first is the financial part of it, where I see that if I surrender my shares for the ADR (American Depository Receipt), then the acceptance ratio, even a 50% of the surrender that comes in for the ADR would be closer to about 10% of my total holding. In turn, the price ratio between the current price prevailing in our bourses and for the ADR, which was somewhere around USD 52 yesterday, has narrowed quite a bit.

Earlier, it used to be closer to 50% premium on the ADR, but now it is narrowed down quite a bit. So it does not have that kind of a value any more for doing the same because 10% and further premium of 10% just boils down to a very small amount.

Second, I happen to be a proud Indian and holding Infosys by itself seems to be a great idea because China does not have an Infosys and we do. So we are proud to be holding it and surrendering that to the ADR and the foreigners holding would be something like selling a part of the Taj Mahal.

So I will be happier holding my Infosys shares without going down to the foreign bourses.    

Q: What is it that you intend to do with your shares? Are you going to tender?

Patel: As an investor, I would first like to acknowledge integrity of the promoters. We all know about the integrity of the promoters. Second, the company has been doing consistent growth. Unlike the other two ADS (American Depository Shares) issues, there was a premium of 30-50%. It has taken about six-seven months by the time they had announced the issue and the listing and trading started.

Even the difference is 11% this time, if you see both the ADS in the past, the difference had further contracted because the domestic price has further gone up. I am quite confident that this difference of 10% will also further contract by the time it starts trading by end of November. So I would not like to sell any of my stocks as of now.

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