INFOSYS: FINANCING AN INDIAN SOFTWARE START-UPS
Infosys is small software development venture which provides information technology (IT) consulting services for international clients. The company is located in Bangalore and was founded back in 1981 by a small group of skillful entrepreneurs, with very little equity of 1000$ and without backing from a large companies.
Mr. R. Narayana Murthy is the CEO and chairman and Nandan Nilekani is the president and chief operating officer (COO), of Infosys Technologies Ltd.
Being a company grounded on a Indian soil at that tome was not an advantage for Infosys because the economic policy supported by ...view middle of the document...
On the productivity basis the company was comparably favorable than US companies but they were not able to generate revenue per employees. Plus the company realized that its steady growth and low profits will lead the company to crash.
Yes, Infosys should list on US stock exchange because of the following reasons:
* The company needed to move up the value chain by increasing the revenue per employee and the customer base. The company also needed to be seen as a “True” competitor of foreign companies like Cambridge Technology Partners in US and an ADR(American depository receipt)offering in the US will allow the company to accomplish that goal.
* ADR will also help Infosys achieve other goals such as – recruitment of International employees. This would provide flexibility to the company and they can offer a compensation package in US Dollar.
* The would also provide currency for acquisitions in the US or any other international localities.
* The current investors of the company will also gain a s 26% of investors are from US and other international localities. The company is aiming to help them by getting government approval to allow foreign investors to convert existing shares in ADRs.
According to me the company be listed on NYSE (New York Stock Exchange) because NYSE is much more known to people than NASDAQ. And if the company wants to grow it gets the good opportunity to the company to advertise its company to the customers. And since the company wants to compete with such giants as Cambridge Technology Giants, than it is to be listed in NYSE (as per EXHIBIT 16.
2. Do you think Narayan Murthy was an outstanding entrepreneur? Give Examples
Yes, I think that Narayan Murthy was an outstanding entrepreneur. Few pf the examples are shown below:
(a) He was the first one to realize why one of his co-founder left the company and shifted to U.S.
(b) He had the quality of leadership, as when the plan was being changed he convinced all the co-founders to sell of their shares to him.
(c) Murthy served as a President of NASSCOM, the software trade association in India, (1992-1994)
(d) Murthy was the first one to create a vision for creating maximum value in India in a legal and ethical manner, which later on did hit heights in the country.
(e) Murthy was well concerned about both his company and the employees, as when their stock value appreciated by 142%, he was the one to step forward and say that The company has a moral obligation to perform good both to the employees and the shareholders.
(f) He is the one who pin points all the available aspects and the opportunity that the company is facing.
3. How did he and his team overcame a whole range of obstacles and created an extra-ordinary successful company? Do you think that difficult challenges make an entrepreneurial firm stronger?
He and his team and worked hard, looked...