Sify promoters pump in $21.7mn to fire growth plans

After announcing in August that it was raising USD 86 million from its promoters, the Nasdaq-listed Indian Internet and IT firm Sify Technologies has reported the first infusion of capital with promoters Raju Vegesna and his brother Ananda Raju Vegesna, who serves as the Executive Director, investing USD 21.7 million in the company.

Sify Technologies derives a significant part of its revenues from corporate services, that include 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.

Besides the company's new data center in Noida, which will be complete in the next fiscal year, Sify Technologies will invest the $21.7 million in expanding its network. Sify has an existing data center in Bangalore. Sify has also stated in the release that the US market will continue to be its focus for market growth, both horizontally and vertically.

Advertising revenues for two portals run by Sify improved in the quarter, growing by 30% over the previous quarter. The company's consumer portal Sify.com has channels on news, entertainment, finance, sports, games and shopping. Sify also operates Samachar.com that is   aimed at NRIs. Both sites have received a boost in usability with tools like HTML5, Jump lists and personalised recommendations being added.

The company has reported a total operating revenue of $38.72 million for the quarter and its net losses stood at $2.09 million. Its new performance management and procurement systems are expected to help it realize benefits of the cost optimization activities it has undertaken.  While Sify's infrastructure/ hosting business grew by 26.35% year on year, the company noted a revenue increase of 6% from the previous quarter for International long distance traffic in its managed voice services division.

Its systems integration business completed the State Data Centre project for Tripura and is now working on a similar project for the Jharkhand government. Its elearning division has also got some wins - it added 3 new accounts over the quarter and has piloted a new learning product with a local partner in China. Sify also announced a partnership with Nokia Tej, a hosted mobile order management service.

Launches during the quarter include Express Night Connect services, targeted at call centres and BPO markets and a VoIP service for internet cafes and PCOs (in October 2010) Sify Talk. It also signed a content partnership with entertainment firm Hungama Digital Media to sell coupons for music and video downloads at its cyber cafes. Cyber cafes registering with Sify rose in the quarter. The company has reported, "In perhaps the first time in more than 3 years, the numbers   of cafes opting for Sify registered a significant increase over the previous quarter. A 14% growth has been recorded over the previous quarter up from 8% over quarter one."

By: Madhav Chanchani