Even today, I get questions on the valuation. I have a 2-part answer.

First, there was another suitor for IndiaWorld, so it was a competitive bidding situation.

Second, look at what happened to Sify stock the day the deal took place. It rose about $700 million on the day after the announcement of the acquisition. In fact, the stock began a meteoric rise that saw Satyam Infoway’s valuation touch almost $10 billion in the next few months as it did a follow-on stock offering on Nasdaq.

One has to put that era in context. It was a time when it was a race against time to build web businesses and money was available in plenty for first-movers. IndiaWorld was the leader in the Internet space in the Indian context. And that is what helped us (and later, Satyam Infoway).

Of course, starting in late 2000, there was a re-rating of everthing dotcom. And Satyam Infoway too experienced a downturn in its stck price. But it had raised enough capital to go about building its business through the next few years.

Tomorrow: The Essence