The phenomenal capital appreciation which have been offered by these companies is now drawing increasing attention to this sector not only of the retail investors but also of FIIs as well as mutual funds, some of whom have even floated IT specific funds.

Significantly, while in 1997-98, there was not even a single issue from this sector, four software firms which entered the market in 1998-99 have provided the green signal. According to Prime, all these four issues: Sonata Software (Rs 22.70 crore), KPIT Systems (11.61), Cybermate Infotek (2.15) and Shri MM Softek (1.75) evoked overwhelming response from the investors and have subsequently yielded handsome returns uponlisting. Similar has been the success story of the Infosys ADR issue.

Unfortunately, Prime fears that history seems to be repeating itself. Some unscrupulous promoters are again exploiting a euphoric condition to defraud the investors. At least 40 companies, most being NBFCs, have rechristened to suggest a software activity. While most of these scrips have already been recording handsome gains in he secondary market, the possibility of several of these companies raising capital through public and/or rights issues is quite strong.

In the overall scenario, the current fiscal may not witness any significant revival of the primary market, the reasons being investors' apathy, stringent entry barriers and generally despondent political/economic scenario. In addition to the few software and other issues, what is, however, only certain is the continuing raising of debt by the financial institutions. IDBI and ICICI have already obtained SEBI's permission to raise Rs 6000 crore and Rs 4000 crore respectively duringfiscal 1999-2000, while IFCI too is planning a foray in the near future.