After Polaris, Subex Systems, Helios & Matheso and Compudyne Wynfosys, VMC Software and Amex Information Technologies are the latest to file prospectuses with Sebi. VMC Software is tapping the market with an equity issue of 7.7 lakh shares at a price of Rs 95 (premium Rs 85) aggregating Rs 7.31 crore. Amex Information Technology on the other hand is raising Rs 6.87 crore through the issue of 12.5 lakh equity shares at a price of Rs 55 (premium Rs 45).

After the NBFC IPO boom in 1994-95, it's now the turn of the software sector. What started as a rechristening of names by finance companies is now gradually translating into an IPO as anything and everything with an info-or soft-tag is being picked up from the secondary markets blindly by investors.

Four prospectuses filed with Sebi in the past few weeks reveal that these companies were originally finance companies and have now turned into software companies and tapping the market for fresh funds.

The erstwhile Express Financial Exchange, a Chennai-based financial services company, rechristened Helios & Matheso Information Technology, is offering 21.63 lakh shares at a premium of Rs 40. VMC Software, formerly known as Vidhan Mercantile Company, too is offering its shares at an exhorbitant premium of Rs 85.

However, it may be too early to conclude that these IPOs, despite high premiums, may not yield rewards to shareholders. Although some of the recent IPOs and bigger software companies have given rich rewards to the shareholders, but the success of these comapnies may not be replicated by smaller companies.

For example, Sonata Software fared well on the bourses and the returns were in the range of 250-300 per cent.KPIT Systems, whose maiden public offer was oversubscribed 43 times, was listed at the Pune Stock Exchange at Rs 400. Thus on an issue price of Rs 90, the investors saw their investments appreciate approximately 350 per cent within a months time.

Riding the software boom and the excellent performance post-IPO on the bourses by at least four software companies has encouraged at least eight more companies to go public and charge high premium. Polaris Software Labs will be the highest-priced software public issue in recent times. Polaris is offering its equity shares at a premium of Rs 210 per share.

VMC Software too is charging a high premium of Rs 85. Although the other high premium software IPOs post issue have not done badly on the bourses, but one need to look deeper into these companies' financials. At the same time, the Rs 2.5-crore IPO by the Bangalore-based Compudyne Winfosys is an exception, which is offering 25 lakh shares at par.

Another interesting trend has been witnessed in most of therecent software IPOs. Most of the companies have opted to initially list the equity shares on regional stock exchanges. Brokers feel that this creates scarcity of floating stock resulting in price manipulation.

Helios' shares would also be first listed on the stock exchanges at Chennai, Hyderabad and Ahmedabad. Amex Information would be listed only on the reagional exchanges of Pune, Ahmedabad and Hyderabad.

Among the latest to enter the software IPO list, VMC Software is going public with an equity offer of 7.7 lakh equity shares at Rs 95 (premium of Rs 85) per share aggregating Rs 731.50 lacs. Another 2.33 lakh shares have been reserved for promoters/friends and relatives at Rs 105 per share. Of the public portion of 7.7 lakh sahres, around 1.8 lakh shares have been reserved for NRIs/OCBs.

Although the company's existing equity is listed on the Bombay Stock Exchange, but are hardly being traded. The issue is being lead managed by Keynote Corporate Services.

Vidhan Mercantile was incorporated in 1985as a finance company and was engaged in trading and investment activities. The company changed its name to VMC Software to commence software-related activities from August, 1998.

Further, prior to the public issue, the company issued bonus shares in the ratio of 1:2, which would help promoters consolidate their holding. The record date for the bonus issue has been fixed as June 19, 1999.

The project has not been appraised by any bank or financial institution and of the project cost of Rs 10.4 crore, so far only Rs 9.5 lakh has been deployed.

On the other hand, Amex Information Technologies is offering 12.5 lakh shares of Rs 10 each for cash at a premium of Rs 45 per share (price of Rs 55) aggregating Rs 687.50 lakh.