Sify Technologies Limited is planning to raise $86 million through a fresh issue of equity to the promoter group in the form of Indian shares and not American Depository Receipts (ADRs) and therefore will not be traded on the Nasdaq like rest of the securities of the firm.

The shares are to be issued to entities affiliated with Raju Vegesna, Chief Executive Officer and Managing Director besides his brother Ananda Raju Vegesna who serves as the Executive Director of the firm that is into Enterprise and Consumer Internet Services in India.

The proposed share issue of 125 million equity shares of Rs 10 each at an issue price of Rs 32 per share(or $ 0.69 per share) wll be at a discount to the prevailing ADRs since the proposed allotment of shares is for unlisted Indian equity shares and will not be registered in the United States or traded on Nasdaq as ADRs, the company said in a statement. The proceeds from the proposed issuance will be utilised for working capital, ongoing capital expenditure and future expansion, it added.

Sify Technologies scrip last traded at $1.24 down 3.13% over the previous day. The scrip has lost 20% of its value over the last one month. Incidentally, the proposed preferential allotment of shares has been approved by the board early this month.

The proposal has now been recommended to the shareholders for their approval at the scheduled Annual General Meeting on September 27, 2010. The company has not disclosed the reason for opting for a preferential allotment route of shares that too to promoters and for securities that will not be available for trading in US. This is expected to be clear soon as US investors would like to know the details before approving the same.

Given the two year old case of Satyam where the promoters had initiated a move to sell their privately held firms to a public listed company, US investors will be looking at another Indian IT firm proposing a complex transaction much more closely.

Meanwhile, Medianama has hinted that the company could be looking at an India listing that could explain the proposed transaction.

Sify Technologies derives a significant part of its revenues from Corporate Services, that include corporate connectivity, network and communications solutions, security, network management services, enterprise applications and hosting. Its consumer services include broadband home access and the ePort cyber cafe chain across more than 200 cities and towns in India.

It also has the consumer portal Sify.com with channels on news, entertainment, finance, sports, games and shopping. Sify also operates Samachar.com that is aimed at NRIs and its content is available in eight languages, including Hindi, Malayalam, Telugu, Kannada, Tamil, Punjabi and Gujarati in addition to English.

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