A Volatile Way

REDF and SIFY can be also used as leveraged plays on the Indian stock market in general. The idea is-with the booming Indian economy and stock market, it is good to own an entire sector whose fundamentals are looking strong. Right now the Internet sector in the Indian market is basically REDF and SIFY. Be aware that they have good competition from Google India and Yahoo India, both companies who have a significant amount of cash to throw around if they start going on acquisition binges and forcing their way into the India market.

The good news is that Rediff.com already powers the shopping channel of Yahoo India. Yahoo may in turn think about acquiring a passive stake in Rediff-might be the most sensible bet for YHOO shareholders. In either case, REDF looks pretty solid, and with the recent cash infusion in Sify.com, SIFY should also be a good investment.

Sanjay John G.