Investors grab Sify ADS at 9.2% premium-Follow-up issue oversubscribed 15 times
INDIAN infotech companies continue to be on a roll as reflected in the second American depository share (ADS) offering by Satyam Infoway Ltd (Sify) which was priced at a premium of 9.2 per cent over the seven-day average price on Nasdaq after attracting a sizable investor demand aggregating $2 billions.
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NEW DELHI, Feb. 17
INDIAN infotech companies continue to be on a roll as reflected in the second American depository share (ADS) offering by Satyam Infoway Ltd (Sify) which was priced at a premium of 9.2 per cent over the seven-day average price on Nasdaq after attracting a sizable investor demand aggregating $2 billions.
Satyam Infoway has raised $130 millions through this follow-up ADS offering which attracted a host of global investors, according to bankers. Each ADS was priced at $80, signalling a premium of 21.5 per cent over the 10-day average price of the Sify. The company also exercised the greenshoe option of $20 millions to satiate the demand. The issue was oversubscribed 15 times, bankers said.
The fact that the Satyam Infoway stock appreciated 78 per cent when the Nasdaq-100 rose by 5 per cent even while the company was conducting its roadshows, was a clear reflection of investor perception of the company, bankers said.
The order book for the Satyam Infoway issue was dominated not only by the large traditional institutional investors in the US and Europe, but also specialist technology funds, they said.
At $80 per ADS, the market capitalisation of Satyam Infoway Ltd now works out to $7.1 billions. The second overseas equity offering of the company will mean an equity dilution of only 2 per cent.
Satyam Infoway's initial public offering on Nasdaq last year helped the company raise $86 millions. Each ADS was priced at $18 then, prior to the stock split.
The proceeds of the issue will be utilised for payment of the company's acquisition of the portal, IndiaWorld, and also for expansion.
According to Mr. Amit Chandra, Co-Head, Investment Banking, DSP Merrill Lynch, which was the book runner for the ADS offering, the success of the issue was significant for two reasons. Firstly, it mirrored the serious interest of investors; secondly, it reflected a healthy sign on the perception of global investors of the prospects of Internet business in India.
There is still a great appetite in the overseas markets for Indian companies which have a ``good story, backed by strong fundamentals', he said.
The next candidate for a listing on Nasdaq is ICICI Bank. There are other Net companies lined up, including Rediffusion and Dishnet.
Trading volumes in Satyam Infoway Ltd on the Nasdaq have been substantial. In early transactions, the ADS was traded at $83.
-BusinessLine |
