Indian shareholders to benefit from ADR: Sify

The proposal for American Depository Receipts (ADRs) by Nasdaq-listed Sify is aimed at creating "liquidity" for its Indian shareholders, according to a top company official.

"We are not listed on the Indian stock markets. Hence, we want to provide liquidity to our Indian shareholders by converting the Indian shares into ADRs," R Ramaraj, CEO and MD of Sify, said.

Sify proposal for ADRs is pending with the foreign investment  promotion board (FIPB) as it would result in FDI upto 100%. Currently, the foreign equity in Sify stands at 58%.

The ADR proposal had led to speculation that Satyam Computers, which holds about 32% stake in Sify, may be planning to offload its stake in the venture.

However, Ramraj ruled out any such plans by Satyam. "The intention is to give a liquidity option to Indian shareholders," Ramraj said.

The other major Indian shareholder in Sify is venture capital fund Venture Tech, which holds less than 7% stake in the internet firm.

The ADR proposal was deferred by the FIPB at the behest of the department of telecom, which is reviewing FDI in internet service providers (ISPs).