This study ranks 95 IT companies according to their market capitalisation up to June 30, 2000 and June 30, 1999. The share prices have been determined on the basis of the closing quotations of the two dates in each of the two years, from the official price lists published by the Bombay Stock Exchange. The market capitalisation of the top 10 IT companies increased from Rs 67,837 crore in June 1999 to Rs 2,12,276 crore in June 2000, recording a positive growth rate of 212.92 per cent.

The top 10 in terms of market capitalisation in the descending order on June 30, 2000 are Wipro (Rs 66,453 crore), Infosys Techno (Rs 55,037 crore), Zee Telefilms (Rs 18,478 crore), Satyam Computer (Rs 16,772 crore), MTNL (Rs 13,328 crore), VSNL (Rs 11,493 crore), Himachal Futuristic (Rs 10,174 crore), NIIT (Rs 8,543 crore), HDFC Bank (Rs 6,187 crore) and Global Tele-System (Rs 5,811 crore).

All but eight of these 10 IT companies find a place among the top 10 on June 30, 1999. The eight IT companies are Wipro (Rs 18,868 crore), Infosys Techno (11,992 crore), MTNL (Rs 11,718 crore), VSNL (Rs 8,683 crore), NIIT (Rs 7,858 crore), Satyam Computer (Rs 3,299 crore), Zee Telefilms (Rs 2,716 crore) and HDFC Bank (Rs 1,494 crore).

Significantly, NIIT lost its position by three places in one year, from the fifth on June 30, 1999 to eighth on June 30, 2000. Similarly, MTNL lost its position by two places during the same period from third on June 30, 1999 to fifth on June 30, 2000. However, four other companies improved their positions-Zee Telefilms from seventh to third, Satyam Computer from sixth to fourth, Himachal Futuristic from 21st to seventh and Global Tele-System from 18th to 10th position.

Wipro retained the top position on June 30, 2000 also. This can be explained from its performance. Its total income for the year 1999-2000 registered a growth of 28 per cent over the previous year. And the PAT of the company rose by 121 per cent to Rs 248 crore during 1999-2000 from Rs 112 crore during 1998-99.

Of the top 10 IT companies, the highest rate of growth of market capitalisation was recorded by Himachal Futuristic (1,688.2 per cent), followed by Global Tele-System (809.4 per cent), Zee Telefilms (580.2 per cent) and Satyam Computer (408.4 per cent). Only two companies namely MTNL (13.7 per cent) and NIIT (8.7 per cent) showed less than 15 per cent rate of growth in the same period.

Of the selected 95 IT companies, the ranks of five companies namely Wipro (first), Infosys Technologies (second), Silverline Industries (16th), Sonata Software (27th) and VMC Software (77th) remained unchanged on June 30, 1999 and June 30, 2000.

As many as 38 IT companies improved their rankings on June 30, 2000. Significant among these are Himachal Futuristic (21st in June 1999 to seventh in June 2000), Global Tele-System (18th to 10th), Aftek Infosys (47th to 22nd), Cyberspace Infosys (52nd to 25th), Shyam Telecom (63rd to 35th), Kale Consultants (95th to 43rd), Vakrangee Software (84th to 55th), Datasoft Application (94th to 72nd) and GV Films (93rd to 73rd).

Further, 52 IT companies showed a drop in their rankings on June 30, 2000 from their position on June 30, 1999. Prominent among these are Digital Equipment (9th on June 1999 to 18th on June 2000), HCL Infosystems (11th to 21st), Tata Infotech (10th to 30th), BFL Software (14th to 31st), Maars Software (28th to 46th), Sierra Optima (37th to 50th), Computech International (50th to 61st) and Twinstar Software (56th to 76th). In terms of shares of the top 10 in aggregate market capitalisation, there was an improvement from 80.7 per cent on June 30, 1999 to 81.8 per cent on June 30, 2000.

A study of the frequency distribution of the selected 95 IT companies, classified as per the range of market capitalisation, reveals that 45 per cent of the companies accounting for a market capitalisation share of 1.6 per cent or more belonged to the range of up to Rs 100 crore as on June 30, 2000. These 43 IT companies together accounted for a market capitalisation of Rs 1,647 crore.

In the range range of Rs 100 crore to Rs 1,000 crore, 29 companies had an aggregate market capitalisation of about Rs 9,739 crore, representing about 4 per cent of the total figure. In the first group (up to Rs 100 crore), while the number of companies decreased from 57 to 43, their market capitalisation increased at the annual rate of 29 per cent. In the range of Rs 100 crore to Rs 1,000 crore, while the number of companies increased from 26 to 29, their market capitalisation decreased by 13 per cent.

Also, while the total market capitalisation of the companies belonging to these groups increased by around 10 per cent, their share in the total figures declined from 13.5 per cent on June 30, 1999 to 4.8 per cent on June 30, 2000.

The last range of Rs 1,000 crore and above 23 companies accounted for a market capitalisation share of more than 95 per cent on June 30, 2000. But in the previous year, there were 12 companies in this group which accounted for a market capitalisation share of more than 85 per cent. Only 11 companies are common in both the groups.

The ratio of market capital to equity capital gives an idea of the extent of appreciation of equity capital during a period. In the ratio range of up to 1,000 per cent, around 40 per cent of the companies figure on June 30, 2000 while 60 per cent of the companies figured in the previous year. About 50 per cent (average of two years) are in the highest range of 1,000 per cent and above. In the range of 1,000 and above, the number of companies increased from 39 on June 30, 1999 to 56 on June 30, 2000.

FE Reserch Bureau