This case is fascinating from many angles. It is an impressive start-up technology business. It is another "Bill Gates" personal-achievement story. It is a success story that made the "first in India" in many categories (Exhibit 9). It represents a successful IT business model for emerging-market entrepreneurs. This case can be analyzed in many ways and used for different courses. The following are some of the points to work on for this course.

1. Infosys can choose to go public or cross-list on NYSE, NASDAQ, Singapore Stock Exchange, London Stock Exchange, and so on (consult Exhibit 16). Why choose NASDAQ? What are the benefits/advantages and disadvantages? Besides the Bombay Stock Exchange, which market(s) would be more natural for Infosys to go listed? Why?

2. Why should Infosys issue more equity shares? Does it need more capital?

3. What factors make investing in Infosys attractive to U.S. investors after its listing on NASDAQ? What are the main risk factors of an investment on Infosys (from the perspective of an international investor in 1999 when the internet bubble was in its high)? Describe the institutional and industrial environment for investing in Infosys.

4. What is the appropriate cost of capital for Infosys? What is a reasonable price for its stock to be offered at in 1999? Note that on the first day of trading on NASDAQ, the opening price was $37.38. (You can go to the following website for a built-in dividend discount model program if you think this model is applicable here: http://www.stern.nyu.edu/~adamodar/pc/eqegs/Tsingtao.xls . You need to change the financial numbers to reflect Infosys' case.) Is it appropriate to price an IT stock using discounted cashflow or discounted dividends?

5. What factors are important to consider for the valuation sensitivity analysis? How would these factors change the valuation of the shares? Can anything go wrong with the projected revenue, projected cashflow, and project completion schedule? Remember that the main business of Infosys is to take on IT development projects from its clients, and most of its projects are small and maybe even short-term. Thus, the projected numbers must contain a high degree of uncertainty.

6. From the Yahoo Finance website, you can find out the various valuation ratios for comparable NASDAQ stocks back in March 1999 (which is the month Infosys started on NASDAQ). If you use the valuation ratios for these comparables, how much would you value the Infosys shares?

7. Go to Yahoo Finance to find out how the stock has performed since its NASDAQ listing (ticker: INFY). Do you think the trading volume and liquidity have been meaningful so that additional SEO offerings would be absorbed by the market without much headache for Infosys?

8. Do you consider its listing on NASDAQ a success? Did its listing bring more Indian firms to choose NASDAQ or NYSE listing? To what extent has the Infosys model encouraged the growth of India's IT industry?