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Sify (Nasdaq: SIFY)

For a long time this has been the most overlooked stock in the Indian Sector. They have been growing at a very good rate and expanding in various sectors. The market cap is very low compared to revenues specially when compared to Rediff (Nasdaq: REDF). Rediff has recently taken off since its attaining profitability. No matter what we say about the stock being overlooked, the main reason is Sify not attaining profitability. Management has disappointed the shareholders quarter after quarter. You could specially feel the heat on management in the most recent 3rd quarter conference call. Shareholders want the management to focus more on portals rather that ISP services. Couple of big Institutional investor’s also unloading stocks kept the stock down as well. However, they are done selling. 

However, everything changed on 11/10/2005 with Raju Vegesna buying a 31.61% stake from Satyam (Nasdaq: SAY). He has also been named the Chairman. This is great opportunity to get into Sify now because its very close to profitability and all the media hype it will get. I like the following statement from the release, Mr. Vegesna further noted that, “Sify’s existing core businesses provide a strong platform for future growth both organically and through possible acquisitions — growth that I hope to help enable with, among other things, the infusion of Rs 1721 Million in new capital, strategic inputs and assistance in developing alliances with other innovators in this space. Among other things, these contributions should help Sify leverage its expertise and experience into new business opportunities by supporting the company’s efforts to expand its international operations.” We still don’t know how Raju Vegesna has in mind for Sify but at this point anything is better that what we have seen in the past.

I really like Sifymax which is India’s first Broadband portal. They have done a tremendous job with it. Check it out at http://sifymax.com. The Video cricket scoreboard is incredible and is creating a lot of buzz. I recently got a forwarded email from a friend raving about it.