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HCL Tech says market not right for ADR issue

Indian software services firm HCL Technologies Ltd does not plan to float its American depository receipts issue under current market conditions, a senior company official said on Wednesday.

The firm received approval from the Indian government in late November to raise up to $500 million through ADRs.

"The issue is market conditions and today is not an optimum time to go to the market," Vineet Nayyar, vice-chairman, told reporters.

HCL Technologies is ranked fifth among India's top software exporters, with software exports of Rs 6.32 billion ($135 million) in 1999-2000 (April-March).

Its shares have been a big market outperformer in December, jumping 26 per cent compared to a 7 per cent rise in the Sensex in the same period.

The stock was up 4 per cent at Rs 757 in late afternoon trade on Wednesday while the Sensex rose 1.63 per cent.

Nayyar said the company had not decided on which US exchange it would list its shares.

"We are looking at acquisitions but we have not finalised any companies," he said.

Nayyar was speaking to reporters in Bangalore to announce the setting up of a software development facility of HCL Perot Systems, an equal joint venture with Perot Systems.

HCL Technologies, founded by billionaire Shiv Nadar two decades ago, specialises in developing technologies like embedded software rather than a purely service-oriented approach, analysts said.

Company officials had said the US issue was planned to raise funds for investments in joint ventures, setting up of offshore centres and acquisitions.

Many Indian and other companies, mostly from the information technology sector, have postponed plans to tap the US market due to a global sell-off in tech stocks.

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