Two more Indian-backed firms wow Wall Street, parading skill and vision

Last night, the man Wall Street Journal last year called the “Hottest hand in Silicon Valley” conjured up another sizzling company, guiding CorvisCorporation to a $1.1 billion market debut even before it had begun to trade publicly. Adding to Khosla’s track record that currently makes him themost venerated venture capitalist in the US, Corvis (corvis.com) carved itself a piece of history. The American business media described it as the`largest initial public offering by a company that has never made a sale,’ as Corvis’ 31.6 million shares were snapped at $36 a share by greedy underwriters and bankers even before it hit the market.

Corvis originally had hoped for a $400 million IPO by selling stock for $13 to $15 a share. When it begins to trade publicly later today, day traders will doubtless bump the price to many times that price a share, landing more millions into a modest Khosla bank balance already worth billions.

Corvis makes fiber-optic communications equipment. And the reason bankers and traders rushed to grab a piece of the pie is the legendary reputation Khosla has established as the father of fiber optics. Khosla has backed companies like Juniper, Redback, Qwest, ONI and Cerent (sold to Cisco for $7.9 billion). But more than the financial value, Khosla’s reputation is built on his ability to sniff out the very cutting edge of technology.

Corvis, which is funded by Khosla’s firm Kleiner Perkins among others, claims to have developed technology that makes existing fiber optics technology faster, cheaper, and better. Although it is yet to sell a single piece of equipment, communication companies are already lining up to examine goods considered vital to the growth of the Internet.

Corvis isn’t the only taste of India on Nasdaq today. Also debuting is the Massachusetts-based Avici System, which bumped its IPO offering up from $20 a share to $31 and raised $217 million for starters. Founded by IIT-ian Surya Panditi, Avici is also expected to rake in many times this value when it begins to trade publicly.

Remarkably, both Avici and Corvis will be going toe-to-toe against two other Indian-founded companies, Pradeep Sindhu’s Juniper Networks and Desh Deshpande’s Sycamore Networks, making it an all-IIT battle for a multi-megabillion dollar market that features behemoths such as Cisco, Lucent and Nortel Networks.

Market mavens and industry experts agree it is amazing that Indians should be crowding this elite space and say it is evidence of the cutting edge skills they have mastered. In fact, such is the speed and imagination Indians have shown in this field that Cisco is an investor in Corvis and Nortel has a stake in Avici. Two other cutting edge Indian companies in this space was acquired last year by giants in the business. Hemant Kanakia sold his Torrent Technologies to Ericsson for $450 million, and Mukesh Chatter sold his Nexabit Networks to Lucent for $950 million.

Both companies paraded technology that was the envy of the giants in the business. “We are way ahead in the field. Big companies do not have the speed, skill and flexibility we have,” Hemant Kanakia, also an IIT-ian,said in a recent interview to this correspondent.

To understand the technology these companies are dealing with, imagine the Internet to be a human body. If Sycamore and Corvis make the nerves, Juniper and Avici make the brains. Sindhu’s Juniper made gigabit routers that could process millions of bits of data.

Avici claims to have advanced to terabit routers, equipment that can process billions of bits of data.

Similarly, Corvis’ now says its optical networking product can transmit data across greater distances than any currently available technology, a claimSycamore will doubtless try and trump.

Whatever the outcome of the battle in the US, the upshot of the Indian emergence in this frontier space could be incredibly beneficial toIndia. Last fortnight, both Juniper and Sycamore separately launched an office and a subsidiary in India, suggesting that a country without roads andairports could well end up with a worthwhile information superhighway.

Besides Corvis and Avici, two other Indian-backed companies will also be debuting in Nasdaq shortly. IIT-ian Chini Krishnan’s Valicert, an Internetsecurity company, hits the market on Friday. BHU’s Dr Adya Tripathi’s Tripath Technologies too is expected to hit the market soon.