MUMBAI, NOV 13: The list of finance companies jumping on to the `software' bandwagon is growing. Ignoring the guidelines of the stock exchanges and the Securities and Exchange Board of India (SEBI), the latest finance company to take up the lucrative software business is DCL Finance. Soon after the announcement, the share price of DCL Finance has jumped nearly 255 per cent to Rs 16 from Rs 4.50 in the last ten days.In a letter to the BSE on November 4, 1999, the company had said that the board of DCL Finance has decided, subject to necessary approvals, to opt out of the present business of real estate, financial services and diversify its activities into software development and training and insurance agency business.``It's the software business which caught the attention of gullible investors. Share price of the company which was Rs 4.50 on October 30 has now spurted on the Bombay Stock Exchange (BSE) on last Friday. This follows the company's announcement that it will be entering into softwaredevelopment and others,'' said BSE broker BV Shah. DCL Finance was even quoted at one rupee some months ago. It may be recalled that the share price of DCL was nearly Rs 100 during the boom period of 1992 when finance companies were the toast of the day for investors.Market sources said manipulation in the DCL stock began even before the announcement. The number of trades had gone up from 17 for 8350 shares to 65 for 16,100 shares on last Friday. ``Investors are being taken for a ride by the so-called finance companies which are now converting into software companies. With software blue chips like Infosys, NIIT, Wipro and Satyam quoting at high levels, investors are under a wrong impression that any share which carries the software tag will get good appreciation,'' said a fund manager.Merchant bankers estimate that nearly two dozen finance companies have been converted into software companies. The main idea behind this conversion exercise is to jack up the share prices and make a fast buck. Many suchfinance companies had raised money from the public in the garb of software companies. Helios & Matheson, a finance company, had recently gone public claiming that most of its revenues were from software business.Seeing the trend among finance companies to become `software' companies and take investors for a ride, the BSE had recently tightened the listing norms of information technology (IT) companies. The tightening of the norms has come after many IT companies have floated issues and raised money from the public. The BSE now says listing will be done in the case of companies in high technology areas such as IT, internet, e-commerce and telecommunication provided the income from such activity is not less than 90 per cent of total income during the three immediately preceding years.According top brokers, another two dozen companies have changed their name by adding `software', `infotech' and similar information technology jargons to attract the attention of investors. ``Some investors are lapping upeverything which is coming in the name of software. SEBI should come out with strict measures to stop this fraud. After the public issue boom and price rigging in the last three years, the software boom will short-change the investing public once again,'' said an investor.
