Internet firms plan IPO route on high valuations

By Janaki Krishnan

MUMBAI, Jan 25 (Reuters) - Indian Internet firms, having successfully ridden the dotcom boom-and-bust of the 90s, are now lining up to sell shares in the domestic market to take advantage of high valuations, company officials said.

Companies such as People Interactive (I) Pvt Ltd (PI), Cleartrip.com, Rediff.com (REDF.O: Quote, Profile, Research), MakeMyTrip.com, Sify Technologies (SIFYF.PK: Quote, Profile, Research) are among those planning to list their shares in the next two years. "Yes we have plans to list..it will probably happen in April 2009," said Anupam Mittal, chief of PI which owns matrimonial site Shaadi.com and social networking site Fropper.com.

Travel portal Cleartrip's Sandeep Murthy said he had a time frame of 12-24 months for a listing, while rival MakeMyTrip.com is also planning a share sale.

Nasdaq-listed Rediff and Sify will also sell stock to comply with a government rule requiring them to list locally within three years of reporting profits, which both did in 2006/07.

Listing will provide liquidity as well as exit options for investors such as venture funds. For the firms themselves, it means more finance and visibility to boost growth.

"Presence of more companies will establish Internet as a IPO-able category in India and give more momentum to investors in that area," said Alok Mittal, managing director of Canaan Advisors Pvt Ltd, which has funded Bharatmatrimony.com.

THE WEB OF VALUATION

Valuation is crucial for a sector with few performance benchmarks. "Naukri and Rediff will serve as comparables for the broad Internet sector - largely around earnings growth and P/E (price-to-earnings) metrics," said Mittal.