CHENNAI, India - Sify Technologies Ltd. (NASDAQ: NASDAQ:SIFY), a prominent ICT solutions and services provider in India, has successfully completed an over-subscribed rights offering. The company announced on Friday that it expects to raise approximately $30 million in gross proceeds before expenses from the recent issuance of equity shares and American Depositary Shares (ADSs).
The rights offering, which concluded on June 21, 2024, allowed existing shareholders to purchase additional shares directly from the company. Sify Technologies will issue 190,268,698 equity shares and 59,730,265 ADSs, which corresponds to one equity share per ADS, as a result of the rights exercise. The total count of outstanding equity shares for the company, including those represented by ADSs, will reach 433,331,423 post-issuance.
The oversubscription of the rights offering led to the allocation of 13,262,908 ADSs on a pro-rata basis among rights holders who exercised their oversubscription privileges. These shares were distributed based on the number of additional shares or ADSs each rights holder subscribed for under their oversubscription right.
Investors who participated in the rights offering can expect the delivery of the new equity shares around July 5, 2024, while the new ADSs are slated for delivery around July 9, 2024.
Sify Technologies plans to utilize the net proceeds from the rights offering to expand its business operations, focusing on the development of Network Centric Services, Data Center services, and Digital Services, as well as for general corporate purposes.
The rights offering was detailed in a prospectus filed with the Securities and Exchange Commission on June 3, 2024, and is publicly available on the SEC's website.
This fundraising event is a significant step for Sify Technologies as it seeks to bolster its service offerings and market position. The company's forward-looking statements, as disclosed in the press release, indicate plans for future growth, although they are qualified by the usual risks and uncertainties associated with such statements.
Investors are cautioned to consider these factors when relying on forward-looking information. The information for this article is based on a press release statement from Sify Technologies Ltd.
In other recent news, Sify Technologies has released its financial results for the fiscal year 2023-2024, showing a mixed performance. The company reported a 7% increase in overall revenue, reaching INR 35,634 million, with EBITDA also growing by 7% to INR 6,756 million. However, there were notable decreases in profit before tax and profit after tax, which fell by 77% and 93% respectively.
Data center colocation services revenue grew by 9%, and network centric services revenue saw a 10% increase. On the other hand, digital services revenue experienced a slight decrease of 1%. As part of its recent developments, Sify Technologies invested $7.22 million in Silicon Valley startups and proposed a rights offering to finance the expansion of data centers and invest in digital services business growth.
Looking ahead, the company plans to continue investing in data center and network infrastructure expansion, with two new greenfield data center projects in Noida and Chennai set to go live in fiscal 2025. Despite the decline in profitability, Sify Technologies remains focused on infrastructure expansion and service diversification to meet the growing demand for digital services in India.
InvestingPro Insights
Amidst the news of Sify Technologies Ltd.'s successful rights offering, InvestingPro data sheds light on the company's financial standing and market perception. Sify's Market Cap stands at a modest $81.23 million, reflecting its position in the market.
The company's Price / Book multiple, as of the last twelve months ending in Q4 2024, is remarkably low at 0.28, potentially indicating that the stock is undervalued relative to its assets. This is particularly interesting for value investors seeking opportunities where the market price may not fully reflect the company's book value.
Investors should note that despite the low Price / Book ratio, Sify trades at a high P/E Ratio of 537.55, which has adjusted down to 137.42 for the last twelve months as of Q4 2024. This suggests that the market has high earnings expectations from the company, aligning with one of the InvestingPro Tips indicating that net income is expected to grow this year. Moreover, the company has experienced significant price volatility, with a 1 Week Price Total Return of 13.32%, which could attract traders looking for short-term gains.
For those interested in deeper analysis, InvestingPro offers an array of additional tips, including insights on the company's cash burn rate and debt burden. There are 17 additional InvestingPro Tips available for Sify Technologies, which can be accessed through the service's dedicated page for the company at https://www.investing.com/pro/SIFY. Subscribers can use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing a comprehensive toolkit for informed investment decisions.
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