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Patni Computer Systems says it will raise as much as $150 million through American depositary receipts.

The money raised will be used to fund future acquisitions. The company's board of directors approved the ADRs at a meeting.

"Typically, Indian companies issue ADRs to acquire companies in the West. ADRs are U.S.-listed stocks denominated in U.S. dollars that represent equity shares in a foreign currency. They enable global companies to raise funds in U.S. dollars and allow investors in the United States to hold stakes in them.

Patni is one of India's leading software companies, which have thrived in recent years as Western nations increasingly farm out software development, engineering design and routine office functions to low-cost countries such as India to save on costs."

"The fact that Patni is raising money despite having enough cash reserves indicates that it has plans for acquisitions," said ASK Raymond James & Associates analyst Apurva Shah. "It needs to buy companies to grow faster as orders from its biggest customers are expected to remain flat."

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