Loss-making co’s scrip zooms

MUMBAI, July 22: Believe it or not, a company which has made a loss of Rs 13.40 crore for the year ended March 1998 is quoting at a whopp...

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MUMBAI, July 22: Believe it or not, a company which has made a loss of Rs 13.40 crore for the year ended March 1998 is quoting at a whopping Rs 461.50 on the Bombay Stock Exchange. The scrip of BFL Software has zoomed to such an extent it has overtaken blue-chip corporates like Reliance Industries, Telco, Colgate, BHEL, Larsen & Toubro and Tata Tea.

Bangalore-based BFL Software was quoting at only Rs 53 a couple of months ago. The scrip has zoomed by over 800 per cent to Rs 461 now, indicating excessive speculation in the scrip. The scrip has been topping the turnover list in the B1 group of the BSE for quite some time. The turnover of BFL on Wednesday was Rs 15.20 crore.

While all other software companies reported a massive spurt in profits, BFL (with a capital of Rs 5.99 crore) was one exception. As per the balance sheet, for the six-month period ended March 1998, it made an income of Rs 29 crore and a loss of Rs 13.40 crore. The carry-forward losses amount to Rs 2.57 crore. The company has attributedthe losses to the change in accounting system. "Due to this (international standards) method of accounting, audit for accounting for fixed assets and provisions for depreciation has been changed," the balance sheet of the company said.

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Thanks to excessive speculation, the market capitalisation (the total value of all listed shares) has shot up from Rs 318 crore to Rs 2580 crore in less than a year. Another reason for the spurt can be the takeover attempt by Baring India Investment, an equity fund registered in Mauritius. Baring has already acquired 15.05 lakh shares (nearly 25 per cent of the capital) of the company. It has now made an open offer to all the shareholders of the company as per the SEBI takeover code.

Software companies are generally leading the share movement. Satyam Computer already tops the A group in daily turnover, Pentafour Software, NIIT and Wipro are also registering huge volumes despite higher volatility margins on purchases.

DSQ Software scrip also shot up by nearly 800 per centin the last nine months. This scrip which was ruling at Rs 30 has now gone up to around Rs 260. The company is involved in a tussle with Commonwealth Development Corporation — which holds a chunk of shares — over the terms of holding.