The Rs 10 share of Infosys Technologies has already touched Rs 5,000, showing a jump of nearly 500 per cent from Rs 1077 recorded a few months back. This means an investor who is holding 100 shares in Infosys is richer by Rs five lakh now. Wipro, the largest in terms of market capitalisation, has shot up by 700 per cent to Rs 3,495 from just Rs 479 within a few months.Similarly, Satyam has shot up by 600 per cent from Rs 155 to Rs 931.50, Pentafour from Rs 161 to Rs 939.50 and NIIT from Rs 656 to Rs 2132. DSQ Software, an unknown companytill last year, spurted by 1200 per cent to Rs 421 recently. This is happening at a time when the Sensex is still in the 3200 points level and scrips of leading companies are yet to pick up.

The spurt in software scrips has led to a jump in the market capitalisation (total market value of the equity capital) of these companies. Wipro's market capitalisation nearly doubled to over Rs 15,500 crore in two months.This is higher than the market cap of leading companies in the Tata, Birla and the Reliance groups. Similarly, the market cap of Infosys, Pentafour, NIIT and Satyam has doubled or trebled in the last six months.

Seeing the spurt in software shares, promoters have started planning to cash in on the boom. If merchant bankers are to be believed, around two dozen companies are doing the spadework to float software issues. In fact, three new software companies have already applied to the SEBI for new issues.Smelling a chance to rake in moolah, many others are also planning to set up software companies.``Considering the appetite for such shares in the market, one can expect more such issues in the near future. Chances are that there will be a huge premium on such issues... history is likely to be repeated. Investors are yet to recover from 1994-96 public issue scam,'' said a merchant banker.

Indian promoters are known for their herd mentality. Every Tom, Dick and Harry floated public issues in the 1994-96 period. When the boom in finance companies blommed, every promoter jumped on to the band-wagon to set up finance companies. Now with FIIs going for software shares, local operators have also followed them.

Market sources don't rule out excessive speculation in software shares. Software scrips like Satyam Computers and Pentafour lead the turnover of the Bombay Stock Exchange on any given day. ``Not even 10 per cent of the turnover leads to delivery... bulk of the transactions are either squared up or carried forward,'' brokers say.

While Satyam which has a capital base of around Rs 20 crore registereda turnover of Rs 326 crore and topped the list of highly traded companies on the National Stock Exchange on Friday, Reliance -- the largest private sector with a capital base of over Rs 900 crore -- was sixth with a volume of only Rs 120 crore.

On the BSE, it was Pentafour which led the turnover list on Friday. While it's true that leading companies like Satyam, Infosys and Pentafour have come out with bumper profits, experts are not sure whether they will be able to sustain this profit trend. Infosys had reported 120 per cent rise in net profit to Rs 40 crore and Satyam 92 per cent to Rs 19.80 crore for the quarter ended December 1998.

If the regulators and the Finance Ministry are not alert, there will be an explosive growth in software companies, leading to yet another scam. The regulators will have to closely monitor the performance of the promoters of new companies and check the unbrided speculation in software shares on the bourses.