BANGALORE/MUMBAI, DEC 6: Even before the investors could come out of the public issue scam that rocked the capital market in the last three years, the National Association of Software and Service Companies (Nasscom) has recommended dilution in the norms for internet and E-commerce companies making initial public offerings (IPOs) in India.``Nasscom has suggested to Sebi to relax its norms and do away with the mandatory three-year profitability track record for IPOs, especially with regard to internet and E-commerce companies,'' Dewang Mehta of Nasscom said. However, the Nasscom plea seems to have come a little early as investors are still counting their losses in IPOs launched in the 1994-96 period.Sebi had earlier fixed minimum capitalisation and three-year profitability norms for companies planning to make public offerings of their equity. Nasscom argued that keeping in line with global trends, it could be too late for an internet company to wait for three years of profit before going public.Itmay be recalled that nearly 2,000 companies had raised funds through IPOs in the 1994-96 period. Some of them had charged a very high premium for the equity sale. Over 75 per cent of these IPOs are now quoting below the face value of Rs 10, with many of them even trading below Rs five on the exchanges. Sebi had tightened the IPO norms following the IPO disaster.Hundreds of companies had disappeared after collecting funds from the investors. The government and the regulators are yet to frame charges against promoters who had disappeared with public funds.The corporate sector is now rushing into the infotech sector, especially internet and e-commerce areas. It's not only big business groups even small finance companies and new promoters are in a mad scramble to set up infotech ventures. Although no association has come out with figures, it is estimated that hundreds of infotech companies are being created every month. ``Many of them are experienced IT professionals. But shady promoters have also enteredthe scene. If they are allowed to raise funds from the public, another scam will be repeated. In the 1994-96, lax regulations allowed shady promoters to get away with public funds,'' investors said.
