Perturbed by the incoming trend which could seriously hurt the uninformed investors, the market regulator and the bourses are taking a serious look at these companies. As a step forward to pre-empt any fallout from such name changes, on Wednesday, the Sebi decided to make it mandatory for these companies to reveal the income generated from software business in their quarterly results. According to the market regulator, the recourse to such measures has been resorted to curb companies from merely changing their names to suit their purpose.

One of the most disturbing facts about these companies is that a majority of them were earlier in thefinancial services. On January 27, the Bombay Stock Exchange released a list of 21 such companies whose names have been changed to suggest their business interests is in software. Of the 21 companies, 16 were from the financial services sector. Due to the slowdown in the economy and the stringent RBI norms vis-a-vis the NBFCs, these companies were trading below par on the bourses for a couple of years. And riding the recent software craze on the bourses, these scrips have shot through the roof. Accompanied by the price rise, the average daily volumes in these counters have also shot up considerably.

The genuine entrepreneurs are also sore about the trend. According to the MD of a Delhi-based software firm, the presence of such companies with weak fundamentals will distort the market mechanism and the true worth of the good software companies will not be reflected in their share prices. This, in the long term, will surely hurt the genuine promoters.

Earlier, warnings from Sebi and the boursesnotwithstanding, almost all such scrip maintained their northward journey. On February 17, a straight 20 days after BSE's warning, Sunstar Software Systems (formerly, Aashi Leasing & Finance) scrip touched a high of Rs 21.50. Earlier on February 2, a whopping 2.47 lakh shares changed hands on BSE. The scrip was lying below the Rs 3 level for more than a year, and only on September 4, 1998 it started rising from Rs 2 level. It touched Rs 9.80 on September 25, the day it changed its name. Currently, it trades at near its par value.

Bell South Enterprises changed its name to BSEL Information Systems on November 13, the day its scrip was trading at Rs 48.45 on BSE. After touching a high of Rs 146.50 last Thursday, the scrip closed its BSE trading at Rs 128.8.

On August 21, 1998, SRG Financial & Management Consultants changed its name to Proline Software & Finance. On that day, the scrip was trading at a low of Rs 1.55 and touched its four-year high of Rs 22.45 on March 3, more than a month after BSE'swarning. The same day, it also saw a whopping 24.92 lakh shares changed hand on the bourse. On Thursday, it close at Rs 16.75.

GMS Inds changed to GMS Computers on August 21, 1998. On July 14, 1998, the scrip was traded at ten paise. A week after the new denomination it opened its BSE trading at Rs 2.90 and went up to Rs 10.45 on January 27. Currently, the scrip trades near Rs 6 level.

Chicago Software (formerly Chicago Futures & Finance), another notable in BSE's list, went up from ten paise on September 12, 1998 to Rs 7.45 on January 27. It had changed its name on January 21.

Synergy Credit, now Synergy Log-In Systems, changed its name on March 9, 1998. Prior to that, the scrip, was trading at around Rs 1.50 level. After it changed its name, the scrip touched a high of Rs 22 on January 27. On February 15, 1.18 lakh shares of the company were traded on the bourse.