Infotech IPOs catch investors' fancy, more issues to come
Source : MI
Oct 4, 1999, 8:35:14 AM
Is the primary market for tech companies regaining its lost glory? Surely so if one considers the boom in the tech IPOs. The Mumbai-based Kale Consultants, for instance, put up a record showing, with its oversubscription rate being the highest in the past five years for premium IPOs. The Rs 38.25 crore public issue was oversubscribed no less than 65 times, and raised Rs 750 crore in application money - and this is only one.
Hughes Software garnered a mind-bogging Rs 6,000 crore ($1.33 billion) for a mere Rs 250-crore ($56 million) offer, overtaking Infosys' ADR collections earlier this year: a mammoth $1.2 billion. Or take the case of lesser-known Compucom Software, a company specializing telecom Software and Internet solutions. The company's Rs 10.81 crore issue (Rs 75 per share) was oversubscribed 17 times, and collected Rs 91.26 crore.
According to Prime Database, with more than 36 new infotech (hardware, software and computer education) waiting to hit the market very soon, this is just the beginning.
"The software sector is on the upside, which is being reflected in the performance of the companies. Infosys, Wipro and Satyam are topping the charts everyday, and these are performance-backed," says Mr Prithvi Haldea, chief of Prime Database. From big daddies HCL Technologies, Datamatics, Ecode.com, Rediff.com Ltd, Planetasia.com and Zenith Global Consultants to Mahindra Information Technology, Wintech Computers, Unison Information, Softsol India? the list is endless.
"In India, it's the early phase of boom in the IT sector. The pricing of IPOs is relatively low in comparison to the growth in earnings expected in the coming years," says Mr Vallabh Bhansali, director of Enam Financial Consultants.
Between April and September this year, 11 new issues hit the market, when the figure was zero for the whole of 1997-98. In 1998-99, the IPO market warmed up with four new issues - Sonata Software, Shri MM Softek Ltd, Cybermate Infotek and KPIT Systems. |
