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.