Share prices of Rediff and Sify are bound to be hit hard Monday morning (both are traded on Nasdaq in U.S.) after a bubble-bursting story in the latest issue of Barron’s (subscription required to read the full story). The bottomline of the story: Rediff.com’s market cap is way out of proportion to the size of India’s Internet ad market. At Sify, subscriber growth is lagging and cybercafe competition is increasing.

—With a market cap of $740 million, Rediff today trades at 115 times trailing earnings and 88 times forward earnings…also, by Kaufman Brothers’ estimates Rediff’s market cap is more than 13 times the entire Indian online ad market. Data from Comscore shows the traffic has fallen, as the likes of Google and Yahoo make inroads.

—For Sify, though revenues from business services grew 26 percent over the year, retail-Internet access slowed down. And the company added fewer and fewer cybercafes, just 86 in the fiscal fourth quarter, well below previous rates.