The complete list of Indian ADRs traded on U.S. exchanges is listed below:

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The main stock market index in India, called the Sensex, plunged 606 points to close below the psychologically important level of 10,000 at 9975 Friday (Oct 17th). After reaching a peak of 21,200 in January, the index has fallen by 53% in just nine months.

Similar to the other three BRIC countries, India rode the wave up during the past few years and now the market has been hit hard as the commodity-driven economies have crashed. Foreign investors are pulling out their investments from Indian companies on a daily basis. Out of a total market cap of $680B for the entire market, foreigners have invested about $55B. Spooked by the crash in Sensex and markets worldwide, local investors are getting out as well. The theory that somehow India was decoupled from other markets has been put to rest.

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Just like the overall market, Indian ADR’s have struggled since 2008 rolled in.

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Microsoft (MSFT) has announced their decision to pay a hefty premium of $44B for Yahoo (YHOO). In perspective, that amounts to 60 times Yahoo’s projected 2009 earnings. The irony is that Microsoft had issued to its shareholders a special dividend not too long ago with the surplus cash that was available at that time. Had there been enough foresight Yahoo could have been purchased earlier for far less than the current premium without having to borrow money to fund the acquisition.

Microsoft and Google (GOOG) are valued at 14 and 25 times respectively of their forward earnings. Their size dictates that it will be tough for them to grow earnings at a healthy rate going forward resulting in mediocre returns for investors as explained in our article on Google valuation last year. Apart from the modest arbitration opportunity available to purchasers of Yahoo shares and short-term trading opportunities due to the volatility in Google shares, returns are limited for long-term growth investors in shares of either of these companies.

REDF: $197M EV Presents Intriguing Long-Term Opportunity

The chart below tells us more than the performance of the U.S. listed Indian stocks in 2007. What it tells us is just how strong the Indian economy is and the rise of the Indian consumer.

The companies that targeted the local Indian consumers and the local Indian market emerged as the clear winners in 2007.

Bullish calls:

Transocean (RIG): ' … is one that I am really behind, because that's the one that XOM needs more than any other. You've got the $33 special dividend coming up.'
Global Industries (GLBL)
Trico Marine (TRMA): 'TRMA has moved up above Oceaneering International.'
FMC (FMC)
Core Labs (CLB): '…nothing has moved above Core Labs, who you need if your going to plumb the depths for oil that has been forgotten.'
Compellent Tech (CML): 'Came public not that long ago... I like the situation. It reminds me of like a mini-VMware.'
Oilsands Quests (BQI): ' I think that, if you got the right tax regime up there in Alberta, we would start seeing some pin action up there... but we don't get any pin action, because of the confiscatory policies of the provinces.'
VMWare (VMW): 'VMWare is sui generis.'
Novagold (NG): ' … if they win this contract dispute, they would be of the repository of an incredible amount of cheap gold... That's why I've been backing NG...'

F2Q07 Earnings Call

November 1, 2007 8:30 am ET

I have been busy today buying stocks. I added Mothers Work (MWRK) and I accumulated shares of an actual Graham net-net for the Fat Pitch Financials Port. I also picked up shares of an odd lot tender offer and earlier this week I sold my very profitable KBR position in the Special Situations Real Money Port. More details will follow shortly on some of my purchases.

The company’s stock moved up to an all-time high of $27.50 per share on July 12 from $17.94 on July 5. The trading volume increased to more than a million shares from an average of 50,000 share a day, and has since settled in the 700,000 range.

Rediff.com (REDF) has been as moving with a vengeance over the past few weeks. Starting from an amazing earnings report in May, and then following the usual course of buyout and merger rumors, it has moved from a consolidation range ($16-19) to $27 during July 2007. Why?

First of all, it is once again about eyeballs. Rediff has 55 million registered users and who knows how many more “casual users”. The main appeal for investors is that this is the Baidu (BIDU) or the Google (GOOG) or even a Yahoo! (YHOO) for India. Now, the main difference seen for this company as compared to its Chinese counterpart (BIDU) is twofold:

In India, Internet Shares Hardly Come Cheap by Leslie P. Norton

Summary: Just 18 out of 1,000 Indians have internet access. This fact that hasn't escaped investors, who have traded up shares of two India internet stocks -- India's number-three portal Rediff.com (REDF) and its number-one private broadband provider Sify (SIFY) -- to sky high multiples. Rediff currently trades at 115x trailing earnings and 88x forward earnings, while Sify's numbers are 205x and 60x -- compared to Google's modest 29x current P/E. Shares in both were up last week on news Rediff may list its shares in India, and that Sify would train members of its cybercafes in Microsoft (MSFT) Office. But in contrast to steadily growing Chinese portal Baidu.com (BIDU), Rediff (9.7m unique users in April) is losing its grip in India to Google (GOOG) (13.6m) and Yahoo (YHOO) (14.6m), and has seen its market share drop from 34.1% to 25.5% over the past 1.5 years. Over half of Rediff's 2007 pretax profit of $7 million was from interest on cash from its IPO proceeds, and another fifth came from a separate newspaper operation. Bulls contend Rediff is a takeover target of both Google and Yahoo, which may be true, but CEO Ajit Balakrishnan recently said he's considering an India IPO "at some stage" -- apparently hinting he had no plans of selling out. Sify added just 86 cybercafes in FQ4, well below previous growth rates. At the same time, its fees are dropping due to stiff competition from Microsoft-backed HughesNet Fusion, whose planned 5,000 broadband kiosks could outnumber Sify's present 3,638 cafes.

On the other hand Rediff’s (REDF) latest news seems to be more material. But once again has the price run up a little too much? Rediff could have some legal issues down the road with the copyrighted content uploaded to Rediff iShare.

Following is an excerpt from the note Sameet Sinha, Senior Equity Research Analyst, at Kaufman Bros., sent to clients:

MACRO OBSERVATIONS & COMPANY DEVELOPMENTS

TRANSCRIPT SPONSOR

Rediff.com India Limited (REDF)
F4Q07 Earnings Call
May 16, 2007 8:30 am ET