In just one month, the scrip has appreicated by more than 150 per cent -- from Rs 15.40 in October-end to Rs 40.40 at present. This is not the kind of market valuation accorded to finance companies. Clearly, there is more to Citicorp Securities than mere leasing and hire purchase.

According to market sources, the company has made a foray into value-added products which includes certain IT-related services. While the company maintains a stoic silence over the matter (the spokesman refused to comment on the issue), marketmen point to the Directors' Report of 1997-98 wherein a reference has been made to the diversification plans. To quote, "The company has been endeavouring to reduce its dependence on volatilesources of revenue and complement the existing revenue streams with greater proportions of revenue of a stable and annuity nature."

"The Board is pleased to advise you that the company has signed a MoU with Citicorp Information Technology Inds for purchase of their processing services division at a fair market value. This will be the first step that the company will be taking in diversifying into providing value-added services to the banking and financial services sectors, which sectors, it is believed, have good expansion potential and bring in revenues."

The foray into IT-related areas would explain the unhindered rise of the Citicorp stock. Financially, the company is in the doldrums with a net loss of Rs 1.53 crore for the 15-month period ended June 1998. Operational income during the year fell sharply to Rs 9.45 crore from Rs 16.08 crore in the last fiscal. The company has attributed the dismal performance to general conditions prevailing in the NBFC segment plus defaults in its leasingbusiness.

The NBFC segment was already reeling under the pressures of high interest rates, tight liquidity and decelerating demand and, to top this, there were unfortunate developments during the year with defaults in repayment by corporates and the failure of some NBFCs leading to changes in the regulatory measures by the RBI. Amidst all these changes the company posted a profit-before-tax and profit before write-off of bad debts from its regular operations partly because of the sale of its shareholding in Citicorp Brokerage (India) Ltd.