Small IT companies perform well in stock markets

By SiliconIndia   |   Wednesday, 30 July 2008, 04:27 Hrs
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Bangalore: While the well regarded IT companies in India are passing through hard times to mark trade above their respective offer prices due to instability of stock markets, the small and mid- tier companies are posting good results in their operation and performing well in the stock markets, reported The Times of India. Infact the current scenario is like big companies trash is small and mid-tier companies treasure.

Niche offerings and a robust domestic presence are the advantages for the small companies to perform well in the market. Allied Digital Service, a 300- crore provider of system integration topped the list of IPO issuers bucking the market trend. Companies such as MIC Electronics, a provider of telecom software and Redington, an IT solution provider saw a more than two-fold jump in their stock price since listing.

However, well regarded companies like MindTree which listed at 425 is now trading at a discount of over 14 percent and another big company, Sasken is selling at a discount of 40 percent from its offer price of 260.

Amar Ambani, VP research, India Infoline, said that while the traditional IT business model was being shunned by investors, IT players with domestic play and niche service offerings did well.

According to Sudin Apte, Senior Analyst, Forrester, firms with differentiation and focused on specialized services will be able to maintain the growth momentum. Niche IT players are also expected to show stable performance in the days ahead.

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