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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (9950)	12/7/1999 10:12:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

India Software-Baby boomers seek life before IPOs Tuesday December 7, 9:54 pm Eastern Time By Y.P.Rajesh BANGALORE, India, Dec 8 (Reuters) - It may be boom time in the Indian infotech world, but not every privately-owned infant information technology company dreams of going public early as a quick way to grow up. Several leading newcomers say that in addition to possible share listings through initial public offerings (IPOs), they are keeping open such options as seeking venture capital or selling out their entire interests if those would better serve their objectives. Officials of these companies, counted among cutting-edge infotech firms, said they are resisting, for now anyway, the temptation to cash in on the huge investor appetite for infotech stocks in the country. ``We are streamlining all our legal and financial systems towards doing an IPO,' said Paraj Kakkar, business manager of Graycell Applied Technologies Ltd, a four-year old start-up that recently launched its mobile Internet product tentatively called ``Unimobile.' ``But we are not dogmatic about it. We would consider alternative exit options. If a sellout helps grow the mobile Internet market faster, we'll do that,' he said. ``If going public gets better momentum and gives us the money to (go to the) consumer market ourselves, we'll do that. Some of these decisions will also depend on the perspective of second round investors in Graycell.' he said. Selling out rather than doing an IPO can enable owners to cash in on the technology they have developed and move on to another project, or profit from their start-up efforts while continuing to work for the firm that buys them over. Companies doing the takeovers may also bring major technological resources and marketing prowess to the venture. However, the popularity of going for the IPO option instead was demonstrated in the first eight months of the fiscal year 1999/2000 (April-March), when of 25 IPOs in India the bulk were infotech-related and accounted for 12 billion rupees ($276 million) of the total 18 billion rupees raised. U.S. LISTING MORE ATTRACTIVE And analysts have said Graycell could be one of the next Indian companies to overfly the domestic capital market and make an IPO directly in the U.S., emulating leading private Internet service provider (ISP) Satyam Infoway Ltd (NasdaqNM:SIFY - news). A subsidiary of computer software firm Satyam Computer Services Ltd , Satyam Infoway made an offering of 4.8 million American Depository Shares in October and the issue was oversubscribed 27 times before listing on the Nasdaq market. ``This will be a route increasingly pursued by young firms as they may not be able to adhere to the SEBI (Securities and Exchange Board of India) regulation of having a three-year profit record,' an analyst at a British brokerage said. Dewang Mehta, president of industry body National Association of Software and Service Companies (NASSCOM) was quoted recently by the Press Trust of India as saying five more Indian infotech companies would be listed on the Nasdaq during 2000. Mehta also said NASSCOM had suggested SEBI do away with the mandatory three-year profitability track record for IPOs, especially with regard to internet and e-commerce companies, as three years would be too late for them to wait to make an IPO. FOCUS ON FURTHERING BUSINESS OBJECTIVE Rajiv Mody, chief executive officer of Silicon Automation Systems (SAS), a communications software firm, said his company would consider launching an IPO only when it feels it has a strong market presence with its products and solutions. SAS in October announced that chipmaker Intel Corp (NasdaqNM:INTC - news) and Citibank Investment, the private equity arm of Citigroup Inc (NYSE:C - news), had made investments in the firm to take minor ownerships. Mody had then said that SAS had no plans to launch an IPO in the next six months. ``It is important for SAS to seek strategic alliances with strong partners who will bring both technology and market reach as part of their investment,' Mody told Reuters. ``We will consider making an IPO when we feel we have a strong market presence and are in a position to provide adequate returns to our stakeholders and also have the need to create currency to possibly acquire other companies,' Mody said. Aditi Technologies, which specialises in e-commerce customer management software, said in October it planned to go public in the next 12 to 24 months. Chief Executive Pradeep Singh -- a former Microsoft Corp (NasdaqNM:MSFT - news) employee who fully owns the firm -- had said it was looking for a listing in India as well as in the U.S. but may not be able to do it simultaneously due to logistical problems. ``Aditi going public fully depends on when Pradeep intends to encash his investment,' a source familiar with the firm said. ``It is for him to decide how long he wants to continue growing the firm and its brand equity before encashing it all.' ($1 equals 43.41 rupees) biz.yahoo.com