`Infotech’ cos on fund mobilisation spree

Of the 13 offer documents cleared by the Sebi, 11 companies are involved in the information technology and communication business in one way or the other. While seven of 13 issues were priced at Rs 10, all other proposals have a premium. Telecom hardware and software company Arraycom (India) Ltd topped the list of cleared offer documents with a poposed float of Rs 62.55 crore. Sixteen of the 21 draft offer documents received proposed a price of Rs 10 or below, while all others were above Rs 20 per share.

The infotech documents cleared by the SEBI during the week included Micro Technologies (India), Global E-Com India, Kushal Software, Southern Online Services, Jeevan Softech, Online Media Solutions, CS Software Enterprise, Pragnya Software Systems, Weal Infotech and Sagarsoft (India).

The draft offer documents received by the SEBI during the week include: Datamatics Technologies, Ampersand Software Applications, Akshay Software Technologies, Sekurit Saint-Gobain India, MRO-Tek, Pritish Nandy Communications, Tele Data Informatics, Vikram Software, Kirloskar Multimedia, Srico Software India, Cyberwave Internet Solutions, Zen Technologies, Com-U-Learn Tech India and Net Axis Software Services.

It is to be seen whether many of them will raise funds from the market in view of the ongoing crash in infotech shares. Many of the leading infotech shares had crashed by over 60 per cent in the last three weeks, shaking the confidence of investors in infotech shares.

Indicating the rough road ahead, the book built portion of Mascot Systems Ltd’s IPO managed to get only the lower range of Rs 480 for a share of Rs four each. The company had fixed a range Rs 480-580 per share price band, but there were no takers at the higher range.

If the rough patch continues, merchant bankers expect IPOs to delay their mobilisation plans. “Quite many of them are newcomers in the infotech sector. Their aim is to take advantage of the boom and raise money from the public. The recent crash has made investors wiser,” said a merchant banker.

SEBI has also added to the infotech boom by first diluting the infotech IPO guidelines. It later promptly followed up by diluting the IPO guidelines for media and telecom companies.

“I won’t be surprised if some of the IPOs are postponed by the issuers. Nobody wants to stick their neck out when the going is bad. The credentials of some of the companies are also doubtful. The capital market or investors won’t lose anything if they postpone their IPOs,” said a merchant banker.