Infosys ADR Trading Chaos: When American Depositary Receipts Expose Market Gaps

Infosys saw its ADR (American Depositary Receipts) listing on the NYSE experience a dramatic trading halt on Friday after shares surged over 50% in a single session. The dramatic move caught the market’s attention—trading volume exploded to 115.6 million shares, nearly 740% above the typical three-month daily average of 13.8 million.

The Puzzle Nobody Can Solve

Here’s what’s puzzling: no major catalyst explained the move. While Cognizant Technology Solutions gained 1.97% and Wipro rose 6.99% on positive sector sentiment, Infosys barely moved in its home market—Indian shares climbed just 0.7%. This disconnect between the U.S.-listed American Depositary Receipts and domestic Indian trading reveals something important about how these securities work.

American Depositary Receipts essentially allow foreign companies to list on U.S. exchanges. Yet the extreme divergence between Infosys ADR performance and its underlying stock price in India raises structural questions. When a U.S. listing swings 50% while the home market yawns, it signals potential liquidity imbalances or trading anomalies unique to the ADR wrapper.

Broader Market Context

The broader indices climbed modestly: S&P 500 advanced 0.88% to 6,835, while Nasdaq Composite gained 1.31% to reach 23,308. Tata Consultancy Services and other Indian IT peers showed steadier performance, underscoring how the American Depositary Receipts structure created disproportionate volatility for Infosys specifically.

What This Signals

The Infosys episode highlights that American Depositary Receipts trading can experience outsized swings disconnected from fundamentals. Investors holding or considering foreign securities through ADR structures should recognize this added layer of volatility. When there’s a gap between U.S. ADR pricing and home-market valuations, it often points to technical factors rather than genuine business developments.