By Kalpana Shah

Although word was out over the weekend, India’s Infosys Technologies announced Monday in Mumbai that it will be on the Nasdaq 100 when the New York-based stock exchange opens for trading.

India

That makes it the first Indian company to join the elite ranks of companies such as Microsoft, Google, and Dell. Cognizant, a company that made it to the index in 2004 and has a largely Indian workforce, is nevertheless headquartered in Teaneck, New Jersey.

Teaneck, New Jersey

In November, Infosys made a secondary offering of 30 million American Depository Shares (ADS) worth $1.6 billion, with sellers coming from investors on the Indian stock exchange. That issue was oversubscribed three times, indicating that the market had an appetite for more stock than was available.

The ADS issue was clearly to increase the float on the Nasdaq and qualify for inclusion in the Nasdaq 100 list. About 19 percent of the company’s shares are now traded on the Nasdaq.

“This is a proud achievement for corporate India,” said Ghanshyam Dass, Nasdaq’s director for south Asia. He believes this will encourage other Indian companies to seek a listing on his company’s stock exchange.

Asia

Encouragement is something the Indian companies most certainly need to go on the Nasdaq. After an initial flurry of listings from India in 1999-2000 (including Infosys, Rediff, and Satyam Infoway), the Nasdaq has had slim pickings from the subcontinent.

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Some “hybrid” companies, with headquarters in the United States but most of their operations in India, are also listed on the Nasdaq: Cognizant, Kanbay (recently acquired by Capgemini), and back-office systems provider WNS.

India

Sarbanes-Oxley Concerns

While some companies may be scared away by the costs they reportedly have to incur to comply with the Sarbanes-Oxley Act, others just find it easier to tap India’s own stock exchanges for funds. For instance, the IPO by Info Edge, owner of several Internet properties, was oversubscribed 55 times by the time it closed on November 2 of this year.

India

But experts acknowledge that the objective of an IPO is not only to raise funds. For Indian technology companies whose clients reside mainly in the U.S. or Europe, the question is about creating a memorable and trustworthy brand.

Europe“It is a very important milestone for the company and is part of our journey to become a mainstream stock, globally,” said Infosys CFO V. Balakrishnan, in a statement about the stock making it to the Nasdaq 100. Level 3 Communications and Vertex Pharmaceuticals also joined the Nasdaq 100 on Monday.

With a market cap of over $5 billion and revenues of over $2 billion, Infosys’ current success masks the fact that it took the company 23 years to reach its first billion-dollar revenue mark in 2004.

Silver jubilee celebrations have been going on at more than 35 of Infosys’ offices worldwide throughout the year, and the company’s 66,000 employees now have further cause for cheer.