How does Alibaba’s listing compare to Info Edge?

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How does Alibaba’s listing compare to Info Edge?

Alibaba.com listed on the Hang Seng today and rose 122% on debut. The stock was subscribed 180 times. So, how does this dotcom listing compare to Info Edge in India?

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Alibaba.com listed on the Hang Seng today and rose 122% on debut. The stock was subscribed 180 times.

So, how does this dotcom listing compare to Info Edge in India?

This is a story of very high valuations for dotcom companies, analysts said. Alibaba.com raised about USD 1.5 billion through this IPO. The issue price was about USD 13. The stock had a stupendous listing after PetroChina . The stock listed at about USD 31 a share. At that value, the market cap of the company stands at USD 20 billion. It is also 20 times the size of Info Edge and gives the company a price to earnings of 100 times on an FY08 basis, analysts said. So, these are dizzy valuations for dotcom companies.

Yahoo! owns about 39% in the Alibaba group and the market cap to sales for the company for FY08 stands at about 18.5 times, analysts said. From 2004 to 2006, Alibaba's revenues have grown 94%. It seems these higher valuations are coming in not because of the growth that these companies have seen in the past but the kind of growth potential that they are expected to deliver going forward, analysts said.

Alibaba has a P/E of 100 times compared to an 82 times P/E for Info Edge in FYO8, they added. Info Edge happens to be 1/10 the size of Alibaba. Its market cap is nearing USD 1 billion. The company is looking at setting up few more sites. They have already set up bridge.com and asknaukri.com. They are looking at strategic acquisitions in the dotcom space.

Alibaba has also been raising money for that same purpose, analysts said. So, the market is really discounting the kind of growth potential that these companies have going forward despite valuations going crazy, analysts said.