With just over a month for the 2009-10 fiscal to end, Rediff and Sify may be running out of time to list on the Indian stock exchanges. Back in 2008, it had been reported that, as per a government of India notification, both Nasdaq listed entities would have to list in India within three years of reporting profit. Both companies had registered a profit in 2006-07, and the three year period is is ending soon.
Responding to MediaNama’s emailed queries on whether the company is mandated to list in the Indian market, Rediff CEO Ajit Balakrishnan had this to say:
“As an Indian company we are destined to list in India at some point; the exact time will be determined by many, many factors including the growth of Internet users, the state of the equity markets, the state of the online ad industry, our own financial performance, Indian regulations governing such things and our need for capital; no one factor in isolation will determine the timing I trust.”
Over the last couple of years, Rediff and Sify have reported losses in many quarters (though Sify reported a profit last fiscal, possibly due to a settlement of a long pending lawsuit with Yahoo). However, with a cash balance of $48 million as of December 31, 2009, Rediff certainly doesn’t need the money (though more “other income” never hurt anyone: as Info Edge knows).
A subsequent request for clarification on whether the Rediff is mandated to list, or whether that notion is erroneous, hasn’t received a response from the company. We had also requested Rediff and Sify for a copy of the notification (which we haven’t been able to find). Our sources say that the Rediff management had studied the notification; previously, MoneyControl had also reported that then CFO Joy Basu was evaluating an IPO.
We’re also awaiting a response from Sify on the same, and will update if and when we have more information.
Related:
– Rediff Net Loss Down To $1.64M, Revenues Up 18% QoQ As Advertisers Return
– Sify Posts Net Profit, Settles Case Against Yahoo?
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4 Comments until now.
"other income" is a seemingly virtuous syndrome in the Indian media. HT rents out the entire KG Marg Building to get other income, naukri lives off "other income"… And don't even get me started on companies who staked claim in PR for IPOs with confidently nebulous statements like "IPO next year"… "we are on track to go public in 2010"… Public memory is short. Good that you keep digging such stuff ;)
About Rediff & Sify: I dont think this was a PR announcement: the approach that Rediff and Sify usually take is quite mature, particularly since they have investors in the US, and the SEC keeping watch. Both tend to be very careful about their public statements. Our sources did mention that Rediff had studied that notification. dont know neither Rediff nor Sify chose not to comment on our specific question.
I was going through Rediff's Q3 results a week or so ago, and just happened to remember this announcement…so decided to get an update. I guess I've been doing this for too long :P
Its only Indian born and bred companies am talking about. Rediff and Sify cannot afford to do that route. MMT, Yatra, Consim, PeopleGroup have gone public about going public on numerous occasions and never held stand.
rediff IPO may be disaster.. investor aware of Rediff nagative groth reported last three years. ADR investor lost everything in this stock..