Apr. 20 at 2:48 PM
$SIFY
Summary
The ongoing AI infrastructure hype has propelled American Depository Shares of Indian ICT solutions provider Sify Technologies to new multi-year highs.
In an attempt to capitalize on the hype, the company is preparing an IPO for its data center unit, Sify Infinit Spaces ("SISL") at a targeted valuation of
$4.2 billion.
Recent market volatility has resulted in the IPO being delayed, but with AI infrastructure plays in high demand again, I would expect the IPO to commence sooner rather than later.
Under the scenario outlined above, Sify's post-IPO stake in SISL would be approximately 83.1%, with a calculated value of
$3.5 billion.
With Sify's trading at a market capitalization of below
$1 billion, the discount appears excessive. Using the targeted SISL IPO valuation and applying a holding company discount of 50% would yield a
$24 price target, or almost 80% upside for Sify's ADS.
