Thursday, November 13, 2008
What have been the rewards and frustrations of doing it?
Rewards: The biggest reward is of course the visibility that a public company in the US achieves, and this helps in a big way in growing a business rapidly. It allows India based companies to compete in the world market on an equal platform with other US based services companies. For example, acquisition targets are similar for India based companies as they now have a currency that is acceptable in this marketplace. The company is able to expand as a global company rather than merely one with international operations.
Frustrations: Because we are listed in a much larger market than India, it's a challenge to get noticed. More demands are made on companies, in terms of performance and logistics. For example, since going public in the US, we have had earnings calls three times in a day because we have different investor groups in different parts of the world (Asia, Europe and the US). Most US based companies have their shareholders in the US and comply with just one earnings call.
Dealing with two different authorities - the SEC and the SEBI (the Indian equivalent of the SEC) - is like working with two bosses who don't always agree with each other. For example, we were two weeks away from our road show for the US IPO and the SEBI had not yet allowed our US based employees and consultants to participate in the stock option program, something the SEC had already approved. After many presentations to the Indian finance ministry we got their consent on a matter critical to the offering and to our business. Now all companies benefit from this decision, which was withheld until we rallied for it.
Is the environment different for Indian companies trying to do IPOs in the US now?
Difficult market conditions have limited the ability of both non-US based and US based companies to go public in the US markets. But it should be noted that the NYSE listings of Silverline and Wipro have been the only two new substantive IT services offerings in the US market. So while many IT IPO candidates were sidelined, Silverline and Wipro went public, because of the strength of their business models and the vibrancy of the Indian IT industry. Thus, there is more wind in the sails of the Indian IT companies than in many of their US and European peers. So a solid Indian IT business model should be received well in the US markets.
I believe it has become easier for Indian companies to list here because the first few paved the way for others to follow. Many of the bankers, attorneys and accountants who took the first two companies public are more knowledgeable about the processes and the workings of Indian companies and hence have made the process easier.
What are the biggest lessons Silverline has
learned as a public company?
A public listing definitely broadens one's perspective - you view the world differently. We have been a public company since 1992, even though we only went public in the US in 2000. One realizes how small a player one is in terms of revenues and market capitalization when compared with many of the other public companies. It makes us realize that we have only addressed a small percent of the opportunity that exists, and we have both the opportunity and the ability to be a billion dollar company.
