Amid speculations the US-listed Indian portal
Rediff.com was on takeover radar of giants like Yahoo and Google, a leading business publication said shares of India's internet firms were too expensive.
"In a world mad for internet stocks, some of the maddest valuations have gone to two Internet companies in India that trade on Nasdaq -- India's third largest portal
Rediff.com and Sify, the country's largest non-government owned provider of broadband access," Barron's reported in its latest edition.
Shares of
Rediff.com India dropped four per cent or by $1.05 to $25.41 at the Nasdaq on Friday, while that of Sify rose by 2.15 per cent to $10.47.
Yahoo shares were down 1.4 per cent to $26.58, while Google rose by 1.25 per cent to $552.16. With a market-cap of $740 million, Rediff trades at 115 times trailing earnings and 88 times of the forward earnings, while Sify, with a market value of $440 million, sells at a trailing price-to-earnings of 205 and a forward multiple of 60, the publication noted.
This compares with a modest price-to-earnings ratio of 29 times for Google. Besides, Rediff seems to be losing its grip in Indian market as global giants like Google and Yahoo are expanding their presence, the report said.
Noting the speculations about Rediff being a takeover target for Google and Yahoo might be true, the