This week I'll take SIFY
The Next Indian AOL Hits the U.S. Market
Tuesday, October 19, 1999
By Jeffrey R. Hirschkorn
IPO.com
It's hard to tell how any initial public offering would do in this marketplace, but new issue experts feel that India-based Internet service provider Satyam Infoway should perform to expectations. Formed in November 1998, after the ISP market was deregulated in India, Satyam ranks second in terms of customers behind Videsh Sanchar Nigam, a government-owned entity.
Pricing 4.18 million American Depositary shares tonight at $18, at the high-end of revised price talk through an underwriting team comprised of Merrill Lynch and Salomon Smith Barney. Proving that the deal was the apple of everyone's eye, Merrill Lynch increased the range last week to $16-$18 a share, up $12-$14. Each ADS represents one overseas share.
The second largest national provider of Internet access and services to consumers and businesses in India, based on the number of customers as of Aug. 31, 1999, analysts foresee an extremely solid debut. Similar to China.com, Satyam Infoway is tapping into a virtually unoccupied market.
Debuting earlier in the year, China.com offered 4.2 million shares at $20 through Lehman Brothers and turned in a remarkable first-day gain of 233%. At a recent quote of 49 1/2, CHINA has connected in the aftermarket with a return of nearly 150%. Therefore, with both issues tapping developing markets, analysts expect Satyam to take off upon inception.
Boasting a customer base of over 77,000 as of Aug. 31, other business models Satyam is involved in include corporate network and technology services and on-line portal and content offerings. The company reports that during August, its six web sites (news, personal finance, movies, music and automobiles) generated roughly 6.5 million page views.
IT consulting firm International Data Corp. projects that the installed personal and network computer base in India will grow at an average rate of 44% annually from 1.9 million in 1998 to 8.2 million in 2002. Moreover, IDC predicts that the number of Internet users in India will grow 76% annually to 4.5 million in 2002 up from 500,000 last year.
Looking back at the overall IPO market this year, there was another India-based issue to hit the U.S. market trail. Offered in March at $34 through Banc of America Securities, Infosys Technologies, a software developer has really scorched in the marketplace. After posting a modest first day gain of 38%, at a recent quote of 153, the stock has risen an incredible 350% and 309% over offering and opening prices, respectively.
"Turning back to the newest Indian company planning to come public in the U.S. IPO market, Satyam Infoway is now hot, according to IPO experts," said John E. Fitzgibbon Jr., new issue analyst at Red Herring Online in a recent profile of Satyam |
