The Foreign Investment Promotion Board has deferred a decision on Sify's plan to offload equity through the ADR route.
The matter has been referred to the Reserve Bank of India since it involves issues related to foreign exchange management.
The company had proposed a sponsored ADR issue with an overseas depository against shares held by existing domestic and foreign shareholders.
The size of the ADR offering is proposed to be 4.5 million equity shares. The company has set an indicative price of $6.94 for the ADR issue.
The company has a foreign holding of 58.1 per cent. If the balance holding of equity shares is to be subscribed to in the ADR, the foreign holding would be 100 per cent.
The existing policy permits foreign direct investment up to 100 per cent for e-commerce activities on the condition that such companies would divest 26 per cent of their equity in favour of the Indian public in five years, if these companies are listed in other parts of the world.
They are allowed to undertake only B2B e-commerce and not retail trading. Sify at present has the permission for a foreign equity not exceeding 74 per cent.
Sify was listed on Nasdaq five years ago.
Sify's top executives and sportstars like Geet Sethi and Jaspal Rana, who hold equity in the company, want to sell almost their entire shareholding through the proposed ADR issue for 4.5 million shares.
Satyam Computers holds around 32 per cent stake in the company.
According to the company's filings with the Securities Exchange Commission, VentureTech Solutions, which holds the deemed promoter status, wants to sell its entire holding of 35 lakh (3.5 million) shares. The company had, two years ago, invested $20 million in the company.