The American Depository Receipt (ADR) price of two Indian Internet focussed companies — Rediff.com India Ltd and Sify Technologies Ltd — saw a substantial gain in 2011 so far at Nasdaq.

Consider this: The 52-week price range of Rediff at the low end was $1.69 (registered on July 21, 2010) while on the high end it was $17.98 (April 28). The ADR on Monday closed at $14.22. Trading volumes have also picked up in these counters at Nasdaq. The average volume in the last three months was 13.42 lakh ADRs.

Whopping gains

Similarly, the 52-week price range of Sify was $1.18 (July 8, 2010) and $8.54 (April 29) with the closing pricing of $6.75 on Monday night. The average volume in the last three months was 17.27 lakh ADRs.

In 2011, Rediff.com surged a whopping 169 per cent and Sify 199 per cent. During the same period, Dow Jones Industrial Average gained 10.62 per cent, S&P 500 8.24 per cent and Nasdaq 7.96 per cent while the BSE Sensex tumbled 9.13 per cent and the NSE's S&P CNX Nifty 9.28 per cent.

International Internet majors Google Inc and Yahoo Inc displayed a mixed trend. While the former tumbled nine per cent, the latter gained nine per cent in 2011.

Analysts tracking the stock from the US in their reports said there was no specific reason for the share price of the two companies going up at such substantial levels.

Analysts' comments

Sify Technologies operates more than 1,500 ePort Internet cafes that open up the Web to many Indian citizens. It provides Internet and extranet services, Web site hosting, search engine optimisation and security solutions. Last month, the company announced its partnership with Saudi Telecom, the largest telecom services provider in the Middle East and North Africa.

“We are unable to comment on the market price behaviour,” said a spokeperson of Sify.

“There is a greater investor interest in understanding Sify business model. People are appreciating that investments in network and infrastructure and managed services portfolio capability will yield results in the long run. There are firm commitments from Government to increasing broadband penetration to 160 million connections by 2014 with investments of $13.2 billion through creation of a national broadband network. The encouraging part of the policy is to classify the fibre optic network as a national resource and make it available with equal terms to all operators wishing to provide broadband services,” the spokesperson added.

Rediff.com, one of the country's largest Web portals, has a range of community features such as e-mail, chat, video sharing capabilities, e-commerce, blogs, broadband wireless content, and mobile value-added services.

Earlier this month, Rediff rolled out its own group deals program. Rediff's “Deal Ho Jaye!” offer consumers deals on local services including spas, tattoos, hobby classes, hotels, health care and restaurants at 30 per cent to 60 percent off. The deals will be available for 40 Indian cities.

Internet and Mobile Association of India (IAMAI) says, the internet awareness in the country is surging. It estimates that the total number of active internet users in rural areas is projected to rise by 98 per cent this year from 12.1 million in December 2010, to 24 million by December 2011. Cyber cafes continue to be a key access point for the use of internet.

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