"It is customary in markets to split stocks to improve the liquidity of the stock," Infosys managing director Nandan Nilekani told Reuters.

And the news was a big boost for the market as the stock vaulted by more than Rs 400 to close at Rs 9,545 on the BSE and by about Rs 425 to Rs 9,542 on the NSE. During the day it touched an all-time high of Rs 9,750 on the BSE and Rs 9,773 on the NSE. Infosys, which has the second highest weighting at 12 per cent in the top 30-share BSE index, was the main contributor to the index's 1.00 percent gain to 4,733.73 on Thursday. The combined turnover of Infosys stock on both the exchanges was more than 4.5 lakh shares. The market caps ofInfosys is around Rs 30,200 crore.

The market expects stock split into five shares of Rs 2 each. The company's board is meeting on November 29, 1999 to take up the issue of share split to reduce the face value of its equity shares.

Infosys Technologies will be the sixth company after Wipro, HDFC, ACC, Zee Telefilms and Century Textiles to go for share split and reduce the face value of equity shares. The cult of splitting equity into a smaller denomination than the conventional Rs 10 share is catching up fast with the Indian corporates. The sub-division or the split make the company's shares more affordable to the investors. Further, it helps increase liquidity and trading activity in the counter. Zee Telefilm chairman Subhash Chandra had earlier said that the split in case of Zee has been done with a view to broadbase the company's shareholding from metros and large investors to even small villages.

Incidentally, stocks of Zee Telefilms have also been split into shares of Rs 1 each and will debut onthe bourses from December 1.

The trend to reduce the face value has gained currency even in the primary market. The forthcoming IPOs of Hughes Software and Shree Rama Multitech have a face value of Rs 4 and Rs 5 respectively.

Rumours of Infosys going in for a split have been doing the rounds for quite some time now, but the company has now formally decided to take up the issue in its forthcoming board meeting. Following the meteoric rise on the Nasdaq, the company's stock has been scaling new highs in domestic bourses. The stock peaked to a new high of Rs 9,773 on Thursday before closing the day at Rs 9552 on the National Stock Exchnage (NSE). On Mumbai stock Exchange (BSE), the company's stock after peaking at Rs 9750 closed the day at Rs 9545.

Infosys was India's first company to be listed on a U.S. Exchange when its American Depositary Receipts (ADRs) were listed on the technology-laced Nasdaq in March.

Infosys' shares have risen almost five and a half times from their December 31, 1998 level of1,479.25. The rises have been more pronounced since its ADRs, representing half a local share, were listed in March at an offer price of $34. The ADR premiums have led the domestic price movements.

On Wednesday, the Infosys ADR ended at $212-01, down $11-07from the previous close representing a premium of around 92 percent over the domestic market.