NEW DELHI, Nov 4: After touching dizzy heights in the past couple of months, software scrips are now headed southwards. Led by CMC, Aptech and Satyam Computers, almost all software companies have drifted down on the Mumbai Stock Exchange. The fall in the past eight trading sessions, between October 20 and November 3, ranges from 21 per cent to 3 per cent.

While some analysts attribute the across-the-board fall in scrip prices to a technical correction, others say it is due to the declining FII inflows in the latter part of the calender year. Most FIIs close their financial year in December and, hence, scale down investment activity around this time. As FIIs have been the major buyers of software scrips like Infosys, Tata Infotech and Satyam Computers, a downtrend in these scrips is natural.

Yet another theory being propounded to explain the downtrend in software scrips is that most of these companies have hit the ceiling for FII purchases. As fresh purchases by FIIs in these companies requires prior RBI approval, the buying interest in these counters has ebbed. With FIIs no longer on the scene, domestic institutions do not seem to be too interested in picking up these stocks.

If one considers Tuesday's trading, CMC is the biggest loser with a fall of over 24 per cent. The scrip currently trades at Rs 100 compared with Rs 132 on October 20. Similarly, Aptech, which had touched a new high of Rs 921 in mid-October, has now fallen to Rs 714. According to market sources, interested parties, which had been accumulating the stock since mid-1997, are now booking profit.

Satyam Computers is another major loser; the scrip has fallen from Rs 176 to Rs 137. Interestingly, BFL Software is the only gainer in our list primarily on account of the news that the Bangurs are divesting 25 per cent stake in favour of an FII. The scrip has moved up from Rs 76 to Rs 82 for the period under consideration.

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