Satyam Infoway plans to pick up an equity stake in ICICI's web venture, which is to be floated in the near future.
Satyam Infoway (59% subsidiary of Satyam Computers) was the first private sector company to break into the ISP (internet service provider) business. It is the second largest Indian ISP, after Videsh Sanchar Nigam Ltd. (VSNL). As on 30th September 1999, the company offered internet services in 27 Indian cities, with a total subscriber base of 87,000 Internet subscribers. Satyam Info had earlier come out with an initial public offering (IPO) on NASDAQ of US$ 85 m.
The company set a trend by acquiring IndiaWorld, an Internet portal, for an astronomical sum of US$ 115 m in cash.
ICICI plans to initiate a web venture offering a range of web-related products like payment gateways. It plans to offer an equity stake to Satyam Info in this venture. Satyam Info has its own payment gateway project and ICICI's venture will have definite synergies with its project.
ICICI already has a presence on the Internet through its banking arm - ICICI Banking. The latter, along with HDFC Bank, is the only other bank to offer e-banking services at the moment. There is also the possibility of Satyam Info stepping in to pick up a stake in ICICI Banking.
These deals seem to indicate that Satyam Info is keen to establish itself as the country's numero uno portal with an eye on the non-resident Indian (NRI) segment. More importantly, it is moving very fast to pre-empt competition. Although, concerns have been voiced from several quarters about the company's ability or lack of it to pay the balance (US$ 75 m) for the IndiaWorld deal, that has not stopped the company from entering into more tie-ups.
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