Interestingly, though ICIM of UK and its Japanese owner Fujitsu together hold the largest chunk of 46 per cent in FIL's equity, the company is classified a groupie of `RPG Enterprises'! As a matter of fact, RP Goenka group's stake in FIL is only 29 per cent in an equity of Rs 17.44 crore.

For the 21,000-odd public shareholders, who collectively hold about 20 per cent of FIL's equity, the recent flare-up in FIL's share price is indeed a great bonanza. But, how long will the current buoyancy last? It may be recalled that only about two years ago the management had indicated that FIL was a "potentially sick industrial company" because of the erosion of more than 50 per cent of the "peak net worth" as on 31st March, 1996. Thanks mainly to a deftly drawn game plan ofrestructuring, it is no longer considered "potentially sick" and is now said to be completely outside the purview of the BIFR.

Originally started as a `hardware company', FIL diversified into software development a few years ago, even when its three subsidiary companies were already predominantly engaged in software development. As hardware hawking, the mainstay of FIL's business, took a severe beating, the company could hardly declare any dividend for more than a decade. The last dividend paid in 1987 by the company, in fact, was 16 per cent for the 15-month period ended December 1986.

During the nineties, though FIL's turnover increased at a steady pace, its bottomline declined year after year since 1992. In fiscal 1995, it ended up at a loss of Rs 3.18 crore. And, in the next fiscal, the loss shot up to Rs 22.88 crore, wiping out the equity capital of Rs 17.44 crore! Then came the grandiose plan of `restructuring'. FIL's profitable software division was hived off and transferred to FIL's subsidiary,International Computers (India) Ltd (ICIL) with effect from October 1, 1996.

The transfer fetched a total consideration of Rs 45 crore, comprising of Rs 25 crore-lumpsum for the assets and liabilities transferred to ICIL and Rs 20 crore-`non-compete' fee. Payment of this consideration was adjusted against a Rs 33.95 crore-fresh issue of ICIL's 6,65,700 equity shares of Rs 100 each at a premium of Rs 410 a share, treating Rs 7.83 crore as loan receivable from ICIL and transferring a Rs 3.22 crore-ICICI-term loan to ICIL.

In September 1997, FIL successfully placed 25.1 per cent of its equity holding in ICIL with JF Electra (Mauritius) of Jardine Fleming group at a whopping premium of Rs 1,150 a share! The restructuring plan thus enabled FIL to take into account a `non-operating credit', or other income, of about Rs 55 crore after extending the fiscal 1997 by six months to September 1997, which converted an operating loss of Rs 23.26 crore into a profit of Rs 7.59 crore in the year ended September1997.

During the year ended September 1998, FIL incurred a total expenditure of Rs 52.23 crore against which, its operating income was only Rs 38.29 crore. However, with a cushion of Rs 21.49 crore as other income, FIL reported a pre-tax profit of Rs 1.07 crore. In the first quarter of the current year too, it has spent Rs 1.71 crore more than its operating income of Rs 6.29 crore. Once again, only the `other income' has rescued the bottomline from falling into red.

As hardware becomes harder to yield any surplus, FIL has now proposed to chop off its loss-making hardware division too. The company has convened an extraordinary general meeting on March 8, 1999, to ratify this proposal. Once the hardware division is spun-off, FIL will remain truly a `shell company' holding shares in its subsidiaries.

And, the company having a slur of no-dividend for over a decade will then greatly depend on the dividend income from the subsidiaries to service its equity of Rs 17.44 crore, as none of the unlistedsubsidiaries could offer any of the routine capital gain available in the short run to the shares listed on the stock exchanges. Added will be the deficit burden. Because, FIL had actually carried, despite its declaration of cosmetic profit, a deficit of over Rs 15 crore at the end of September 1997. Against the carried forward deficit, it could net only Rs 1.25 crore in the year ended September 1998.

Despite all its continuing troubled existence that FIL is blazing a glorious price-run with over Rs 400 premium on the trading floor has naturally perked up the antennae of knowledgeable market analysts. Various guessing games are on, and some of these are allegedly attributed to systematic `informed leaks'. One concerns the possibility of a reverse-merger--the parent being amalgamated with its software subsidiary ICIL.

The seasonally benevolent `software sentiment' has apparently fuelled the flare-up, backed by hefty volumes, in FIL's counter. Nevertheless, `the ornamental management on the screen that isreportedly looking for a profitable exit', prefers to give the impression of remaining a mute spectator.

Meanwhile, the company's move to delay the declaration of its working results has given further elbow room and advantage to the speculators. Despite the company's `restructuring' plan getting implemented in the year ended September 1997 itself, FIL delayed the working results for the year ended September 1998 by more than one and a half month.

Interestingly, the management justified the delay because "it would be in the interest of the shareholders to delay finalisation of the financial result so as to incorporate with the greatest care, the impact of the ongoing restructuring programme"! Is the spill over from the restructuring still accruing? Or, is restructuring the ongoing soft-solution with FIL? Is there any link between the current flare-up in the share price and the management? Perhaps, some of the clouds might clear when the shareholders assemble for the EGM on 8th March.