Shares of relatively little known information technology (IT)
companies have seen frenzied activity on the bourses in the last one
year. Analysts said many of these stocks have been targets of stock
market operators as a wider section of investors and analysts have kept
away from some of these names. Some of them have benefited from the buzz
around e-commerce and internet industries.
Lycos Internet, Sphere Global Services, Cambridge Technologies, Shreejal InfoHub, Dynacon Technologies, G Tech Info-Training and Intra-soft Technologies among many others have risen by up to 5 times so far this year and up to 25 times since 2013.
"Most of these so called new generation companies are unknown to even the most seasoned stock analysts," said Arun Kejriwal, director, KRIS Research. "Several of these companies have no concrete business model, profits or sales," he said.
E-commerce companies like Flipkart, Snapdeal and other new generation software related businesses have generated euphoria among investors. Stock brokers said they get many queries regarding investment ideas based on these themes. But, since there are no listed companies with a business model on these themes, investors are lapping up stocks of companies in the new generation businesses.
"Fundamentals in many of these companies are extremely weak," said Sudip Bandyopadhyay, equity investor and promoter, Juno Moneta Technologies. "The business model of many of these companies could just be a pipe dream. I do not think any stock analysts are covering them yet."
Promoter holding in many of these companies have declined as the stock price rose. For instance, the promoter holding in Dynacon Technologies has come down from 47% in June 2013 to 35% as on June 2015. G Tech Info Training has no promoter holding; 100% of its shares are with public category. Lycos Internet and Odyssey Technologies are among the other companies with falling promoter holdings and rising share prices.
Lycos Internet, Sphere Global Services, Cambridge Technologies, Shreejal InfoHub, Dynacon Technologies, G Tech Info-Training and Intra-soft Technologies among many others have risen by up to 5 times so far this year and up to 25 times since 2013.
"Most of these so called new generation companies are unknown to even the most seasoned stock analysts," said Arun Kejriwal, director, KRIS Research. "Several of these companies have no concrete business model, profits or sales," he said.
E-commerce companies like Flipkart, Snapdeal and other new generation software related businesses have generated euphoria among investors. Stock brokers said they get many queries regarding investment ideas based on these themes. But, since there are no listed companies with a business model on these themes, investors are lapping up stocks of companies in the new generation businesses.
"Fundamentals in many of these companies are extremely weak," said Sudip Bandyopadhyay, equity investor and promoter, Juno Moneta Technologies. "The business model of many of these companies could just be a pipe dream. I do not think any stock analysts are covering them yet."
Promoter holding in many of these companies have declined as the stock price rose. For instance, the promoter holding in Dynacon Technologies has come down from 47% in June 2013 to 35% as on June 2015. G Tech Info Training has no promoter holding; 100% of its shares are with public category. Lycos Internet and Odyssey Technologies are among the other companies with falling promoter holdings and rising share prices.
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