MUMBAI/HONG KONG, FEBRUARY 17: As part of its plan to `finance' the costly acquisition of IndiaWorld Communications, Indian Internet major Satyam Infoway Ltd has floated its second US issue to raise US $ 130 million on Thursday. The company priced 1.625 million American Depositary Shares at $ 80 each in a placement expected to raise about $ 130 million, book runner Merrill Lynch said on Thursday.The company has granted Merrill Lynch an over allotment option of 250,000 ADSs. Each ADS represents one fourth of one equity share of Satyam Infoway, which is already listed on the Nasdaq Stock Market. In filing for the sale with US regulators earlier this month, the company had said it would use net proceeds to acquire the remaining 75.5 per cent of IndiaWorld Communications as well as to fund network infrastructure expansion and enhancement, advertising and general corporate purposes.According to analysts, bulk of the money raised will go towards financing the IndiaWorld takeover. Satyam had taken over IndiaWorld late last year for a whopping sum of Rs 499 crore. ``Overseas investors are paying for the costly acquisition of IndiaWorld. Any which way you look at it, at $115 million, Satyam Infoway paid an awfully high price for its IndiaWorld acquisition. The ostensible reason is to capture the 13.5 million page views built up over five years. If one were to go by the same parameter, Lycos, Yahoo, GoNet and Infoseek, among the largest portals on the world wide web (WWW), are cheaper to acquire than IndiaWorld,'' said an analyst.Ajmal Rahman, managing director of equity capital markets for Merrill Lynch (Asia Pacific) Ltd in Hong Kong, claimed the road show for the issue generated $ 2 billion worth of demand. The price represents a 9.25 per cent premium to Satyam Infoway shares seven day averge price, he said. The shares closed on Nasdaq on Wednesday at $ 83 each on Wednesday.Satyam had last year launched an ADS issue, thereby becoming the second Indian company after Infosys Technologies to list the shares on the tech-laden Nasdaq. "This reflects the excitement of the company and the potential of the Internet in India," Rahman claimed.Analysts expect around eight Indian companies - mainly infotech, telecom and pharma companies - to list on the Nasdaq in 2000. Even banks - ICICI Bank has already filed the papers with the Securities and Exchange Commission of the US - are talking about listing on the US. ICICI Bank is expected to launch its ADS issue by the end of March this year. It will be the first Indian bank to list its shares on the Nasdaq. ICICI had last year listed its shares on the New York Stock Exchange.
