Sify Technologies: All Eyes On Proposed Data Center Segment IPO - Buy (Rating Upgrade)
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Henrik AlexInvesting GroupFollow5ShareSavePlay(6min)CommentsSummaryThe 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. Looking for a helping hand in the market? Members of Value Investor's Edge get exclusive ideas and guidance to navigate any climate. Learn More » AlexLMX/iStock via Getty Images Note: I have covered Sify Technologies Limited, or “Sify” (NASDAQ:SIFY), previously, so investors should view this as an update to my earlier articles on the company. Almost two years ago, I outlined an opportunityThis article was written byHenrik Alex20.97K FollowersFollowI am mostly a trader engaging in both long and short bets intraday and occasionally over the short- to medium term. My historical focus has been mostly on tech stocks but over the past couple of years I have also started broad coverage of the offshore drilling and supply industry as well as the shipping industry in general (tankers, containers, drybulk). In addition, I am having a close eye on the still nascent fuel cell industry.I am located in Germany and have worked quite some time as an auditor for PricewaterhouseCoopers before becoming a daytrader almost 20 years ago. During this time, I managed to successfully maneuver the burst of the dotcom bubble and the aftermath of the world trade center attacks as well as the subprime crisis.Despite not being a native speaker, I always try to deliver high quality research to followers and the entire Seeking Alpha community.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in SIFY over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.