So what really is driving the stock at Nasdaq? Low floating stock, year-end pressure in the domestic markets and expectation of excellent fourth quarter results have propelled the stock at Nasdaq. The ADR (2 ADRs = one share) closed at US $ 45.875 on Monday, which in rupee terms, works out to Rs 3899.37. On the other hand, the stock closed at Rs 2904 on BSE on Tuesday.

The Infosys ADR made a debut at US $ 34 on Nasdaq on March 11 and touched a 52 week high of $ 50 on the same day. The scrip had closed at Rs 3392 on the local bourses on March 11. According to marketmen, the year-endpressure had led to profit-booking on the Indian bourses. At the same time, fund managers have been busy picking up stocks at Nasdaq.

The scrip, which zoomed to touch Rs 3499 after its 1.8 million ADR listing on Nasdaq, has lost nearly 34 per cent since then. The scrip, which had dropped to a low of Rs 2670 on March 24, closed marginally better at Rs 2707 on Friday. ``As the fiscal year is over, the scrip closed better at Rs 2904, gaining 7.2 per cent over its previous close,'' said one BSE member.

However Milind Karmarkar, head of research, Dalal & Barocha disagrees, ``The year-end logic is not convincing enough for the huge gap. The gap is likely to come down in next few trading sessions.'' ``As mostly retail and individual investors showed interest in Infosys' 1.8 million ADRs, it is unlikely to witness the same fluctuation as the domestic share,'' says an analyst with a foreign brokerage house. The domestic counter normally witnesses institutional interest. Infosys' ADR has been on the rise as thecompany is expected to report excellent performance for the fourth quarter.

According to analysts, the company should end fiscal 1998-99 with a net profit of Rs 140 crore compared to Rs 60.3 crore last year - a jump of around 132 per cent. Net sales are expected to rise by over 90 per cent to Rs 508 crore as against Rs 260 crore last year. The company's board will meet on April 9 to consider the annual results. These expectations justify the high valuation of 117.63 times earnings enjoyed by the Infosys ADR at Nasdaq. ``Even the FIIs who are not registered in India but wish to take exposure to the growing India companies are moving the ADR price up.

Moreover, as the transaction costs for FIIs are lesser abroad, they prefer to pick ADRs,'' says an NSE dealer. Despite these factors the marketmen expect the gap to narrow in the next few trading sessions. ``With the company due to announce its full year results on April 9, the rally in the stock which started today is likely to be sustained,'' says a BSEmember.