Adapting the `book building' route, the over-confident ASTSL had fixed its floor price steeply high at Rs 80 for a Rs three paid-up share. Contrary to the company's expectation, the book built portion of 58.5 lakh shares, whose bids opened on October 12, received a lukewarm response. In all, there were only 1,067 bidders whose demand amounted 1.43 times of the offer. Since nearly 62 lakh shares (out of the total demand of 83.67 lakh shares) had been bid only at a price of Rs 80, the company had no option but to fix the price at the floor level. The fixed price portion of 6.5 lakh shares, which closed on November 9, was subscribed 1.59 times by 2,653 small investors.

To ASTSL's credit, the IPO allotment was finalised within just two weeks (12 days) after the issue closure, and eight days later the scrip also started trading on all the three exchanges where it was proposed to be listed though, as compared to BSE and NSE, the scrip is far less active on its regional Bangalore Stock Exchange (BgSE). After making its debut around Rs 95 on November 29, the scrip is now hovering above Rs 110 on all the three exchanges, thereby yielding a capital gain of about 40 per cent over the offer price in less than a month.

Now, what are ASTSL's future prospects? Though promoted in 1995 as a software development company by a technocrat, S Parthasarathy (an ex-Wipro engineer), ASTSL could hardly put up a decent show in its first four years of existence. It was only after the entry as an "Angel Investor" of the Silicon Valley fame Indian technocrat, KB Chandrasekhar, who is also an ex-Wipro engineer, ASTSL's fortune seems to have looked up. Today, of the total promoters' stake of 66.8 per cent, as much as 46.1 per cent is held by the US-based Chandrasekhar's Mauritius-based holding company.

In other words, the angel investor has now become the `biggest' promoter of ASTSL and the company is also now positioned as a solution provider in the Net infrastructure segment which is said to be Chandrasekhar's forte. But, what's the revenue generating capacity of this high profile angel investor-turned-promoter?

ASTSL may like to talk about Exodus Communications Inc promoted by Chandrasekhar. Exodus was founded in 1994, and its public float in March 1998 was one of the most successful US IPOs of that year.

What was the financial track record of Exodus until Chandrasekhar sold the company in 1999? ASTSL's offer document conveniently skipped this vital information. The performance of his holding company is too pathetic to speak about. Another noteworthy aspect is, while ASTSL put up a grand show in fiscal 2000 (by converting a loss of Rs 1.43 crore in 1999 to a record profit of Rs 4.14 crore in 2000), its 100 per cent US subsidiary went deep into red (incurring a loss of Rs 85 lakh on a turnover of Rs 1.30 crore) in that year! ASTSL's quarterly workings too lack consistency. During the first quarter ended June 2000, on a smaller turnover of 13.83 crore, the company posted a higher profit of Rs 453 crore. But, in the second quarter, on a larger turnover of Rs 18.16 crore it could post a profit of only Rs 4.07 crore.

Technically, Chandrasekhar's entry as an angel investor and the splitting of the scrip's face value from Rs 10 to Rs three might have immensely helped ASTSL to make its public issue a grand success. Also, Chandrasekhar's name may come very handy if ASTSL were to opt for a Nasdaq listing. But, fundamentals like the financial performance of the companies belonging to the promoters and the differential pricing (more than 26 times the face value for public in 2000 as compared to just one and a half times the face value for the promoters last year) weigh heavily against the quality of the promoters.

Moreover, can one judge Chandrasekhar's capability just on the basis of his US IPO's grand success? Even a little known Indian IPO, Sibar Software, too got more than 250 times oversubscription during the IT euphoria, while the IPO of India's software pride, Infosys, was a flop in 1993! Past record shows that Chandrasekhar never had a long term commitment to any project he was associated with. If ASTSL were to bank too much on Chandrasekhar's association for its success, what will happen to ASTSL if he opts out (like what he did in Exodus)? Surely, it will be worse than `Infosys minus Narayana Murthy'! Manipulated price? The small investor portion of 13 lakh shares of the Hyderabad-based Siris Soft Ltd (SSL) could get a subscription of only around 25 per cent even at par value. The IPO sailed through with the help of five large applications apparently coming from some close quarters. Though SSL's issue, lead managed by CIL Securities and Imperial Corporate Finance, had received only 1561 applications in all,the company took 30 days for allotment and another 26 days thereafter for listing.

Interestingly, such a neglected IPO is currently commanding a premium of 80 per cent over the offer price. On what basis is the scrip quoted at a hefty premium?

The software company's promoter, Gokaraju Ganesh Kumar, is not new to Indian investors. Six years ago, as a 24-year-old commerce graduate, he was presented as "Deputy Managing Director" of Siris Ltd when the company went public through an `offer for sale' at a whopping price of Rs 275 per share (Rs 10 paid-up). This scrip has not found any buyer after September 2000 even at a price of Rs 33. The same person who acted as deputy managing director of Siris Ltd during 1994 now claims that he worked with the US trading company, Nichem Corporation, between April and December 1995 as a "management trainee"!

Though SSL's offer document was completely silent about Siris Ltd, the fact was, three more directors of Siris Ltd (including its managing director and wholetime director) were also on the board of SSL when it was formed in 1998. They resigned in 1999- 2000 due to "pre-occupation". The various names floated under the Siris banner, like Siris Laboratories (pharma), Siris Agro (solvent extraction), Siris India (agro chemicals), Siris Cellars (liquor), Siris Aqua (shrimp culture), etc. at various point of time during last decade indicate that the promoters are for all seasons and they don't like to be left behind in any boom!