CHENNAI, India - Sify Technologies Ltd. (NASDAQ:SIFY), an Indian ICT solutions and services provider, announced today a change in the ratio of its American Depositary Shares (ADSs) to equity shares. The adjustment will see one ADS represent six equity shares, effective as of October 4, 2024, which is a revision from the current one-to-one ratio.
This change is equivalent to a one-for-six reverse ADS split, though it will not affect the proportional equity interests of ADS holders, except where fractional ADSs result. No modifications are being made to the company’s equity shares themselves.
On the effective date, registered ADS holders with certificated shares must surrender these to Citibank, N.A., the depositary bank, to receive new ADSs on a one-for-six basis. Those with uncertificated ADSs in The Depository Trust Company and Direct Registration System will have their shares exchanged automatically without the need for any action.
The company's ADSs will continue trading on the NASDAQ Capital Market under the ticker "SIFY." Fractional new ADSs will not be issued; instead, fractional entitlements will be aggregated, sold, and the net cash proceeds will be distributed to applicable ADS holders after any deductions as per the depositary’s procedures.
Sify Technologies anticipates that the ADS price might increase proportionally following the ratio change, although there is no assurance that the post-change ADS price will be six times higher than the pre-change price.
Sify Technologies operates a comprehensive ICT service and solution platform, including cloud-based offerings, and caters to a wide range of businesses across various sectors in India and internationally, with a presence in North America, the United Kingdom, and Singapore.
The information for this announcement is based on a press release statement from Sify Technologies Limited.
In other recent news, Sify Technologies has reported a 10% revenue increase for Q1 FY24-25, reaching INR 9,421 million, despite experiencing a loss before and after tax of INR 46 million and INR 105 million, respectively. The company's EBITDA rose by 3%, totaling INR 1,784 million. Sify Technologies has also announced the appointment of industry veteran Mr. C R Srinivasan as the CEO of Sify Digital Services Limited, a fully owned subsidiary. These are among the recent developments at the company.
Sify Technologies faces potential delisting from Nasdaq due to non-compliance with the minimum bid price requirement and has until January 15, 2025, to regain compliance. The company is also expanding its infrastructure, having commissioned a 6.5 megawatt capacity in Mumbai and added 1,055 fiber nodes to its network. In its digital services segment, Sify is transitioning from project-based to annuity-based revenue.
The information in this article is based on recent news from Sify Technologies and does not include any personal opinions or predictions. It is intended to provide factual information about the company's recent developments.
InvestingPro Insights
In light of Sify Technologies Ltd.'s recent announcement regarding the adjustment of their ADS ratio, investors may be paying close attention to the company's financial health and market performance. According to InvestingPro data, Sify's market capitalization stands at a modest $81.84 million. Notably, the company is trading at a low Price / Book multiple of 0.27 as of the last twelve months leading up to Q1 2023, suggesting that the market may be undervaluing the company's net assets.
While Sify's revenue has seen a growth of 6.71% over the last twelve months, the company's P/E ratio is currently negative at -57.48, indicating that it has not been profitable over the same period. This is consistent with one of the InvestingPro Tips which highlights that Sify has not been profitable over the last twelve months. However, it's important to note that analysts predict the company will be profitable this year, providing a potential upside for investors.
Investors should be aware that Sify's stock has experienced significant price volatility, as indicated by a 6-month price total return of -65.94% and a 1-year price total return of -76.38%. Despite this, the company has seen a strong return over the last month with a 28.46% increase, which could be a sign of recovering investor confidence.
For those considering a deeper analysis of Sify Technologies, there are additional InvestingPro Tips available, including insights into the company's cash burn rate and debt burden, which are crucial factors when evaluating the sustainability of a company's operations. For more detailed tips and metrics, investors can visit InvestingPro's comprehensive analysis at https://www.investing.com/pro/SIFY.
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