A quiet, sudden announcement on Friday night said Infosys has decided to transfer its American Depositary Shares (ADS) to the New York Stock Exchange from Nasdaq, with effect from December 12.
The official reasoning is that the decision was motivated by a desire to utilise the partnership
between NYSE and Euronext and increase access to European investors.
Something in this seems uneasy. Nasdaq is a global market and in the interconnected world of electronic trading, nothing really stops European investors from buying the same stock on the Nasdaq. In 1999, Infosys captured the imagination of the world when it became the first Indian company to list on the Nasdaq.
Now, Nasdaq is more than just any stock exchange. It is known to list Microsoft, Facebook, Google and even Starbucks. It has a pride of place for technology-centric companies. More important, it is a trendy bourse in which disclosure norms are rigid while losses are not frowned upon. Loss-making companies have surged on the Nasdaq based on future potential.
India still has Sify Technologies and Rediff among its Nasdaq-listed companies. But the exit of Infosys, in my opinion, is symbolic of its current shakiness. Could it be that Infosys prefers the relatively easier corporate governance and performance disclosure norms that NYSE offers? Only the coming quarters and expert accountancy analysis can reveal the emerging patterns.
It is clear that for the past several quarters, Infosys has not been able to outshine its peers like Nasdaq-listed Cognizant, New York-listed Wipro and Tata Consultancy Services. Also, Infosys, which pioneered Bangalore-based offshore outsourcing services, is being easily emulated and surpassed by global firms like IBM, CapGemini, Accenture and the like whose work-forces in India now are a challenge to Infosys.
Infosys CEO SD Shibulal has been talking about innovation and customer-centric services, but there is nothing dramatic in its story to differentiate it, while performance sags. What Infosys really needs is a change of course, not bourse.