Probity Reports
27-11-1999 19:42:38
SIFY crosses $100 mark
Satyam Infoway, the only Indian Internet company listed in the American bourses reached an all time high of $105.5 during Friday's close. The scrip gained 33% in a single day of trading and more than 75% compared to last Friday's close of $60. The scrip, which was recently listed in the NASDAQ, has added nearly 200% to its listing price of $35.5.
Satyam Infoway is the first private national ISP in India and the second largest ISP after VSNL. The company is also among the leading portals in the country. The company's maiden issue of $75mn was oversubscribed by over 20 times. It attracted over 250 global investors including venture capitalists, insurance companies and IT funds. A recent research note by Merrill Lynch said that it started coverage of Satyam Infoway with a near-term accumulate recommendation noting the Indian Internet firm`s rise since its initial public offering.
Also, there have been recent reports of strategic investors like America Online talking to the company. In a recent interview with India Infoline Mr Ramaraj, CMD, Satyam Infoway said "We are the leading player in India and definitely the number one private ISP. A number of companies have been in talks with us. Today, there is nothing significant which I can share with you."
Currently, for the international investors, the company provides the only exposure to the Indian internet growth. Also, the company has presence in not just Internet access but also in content and e-commerce. Says Mr Ramaraj "if we were a pure play ISP it would take a lot longer for us to break even and for revenues to reach a certain stable level. The fact that we are not a pure play ISP but an integrated player with a presence in three distinct areas gives us an advantage over someone who is just a pure ISP."
He added, "Today about 60% of our business comes from the consumer Internet access. About 40% comes from corporates and portal side of business. This means that we already have a reasonable mix and as the market starts maturing we will become even more balanced. I expect the dependence of our business on consumer business will come down a bit, in the long term."
There has been a sudden fancy of Asian Internet IPOs. China.com, a leading portal in China was trading at $121. During Nov 15, the scrip witnessed a jump of nearly 75% in a single day after US announced a trade deal with China.
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