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September 30, 1999
IT market cap spurts to Rs 1.047 trillion
Market capitalisation of information technology companies has grown by 78 per cent in the last six months to reach Rs 1.047 trillion.
The bulk of the wealth generation has gone to shareholders of Wipro, Infosys Technologies and NIIT Limited.
While shareholders' wealth increased by 35 per cent in the April-July period, the market rally kept the pace in August-September, adding valuations by 32.4 per cent.
In absolute terms, the market cap in the April-July period went up by Rs 205.1 billion and Rs 256.3 billion in August-September.
The IT market cap has leapfrogged essentially because of overheating in Wipro, Infosys and NIIT. The three of them share a wealth of Rs 650 billion, much more than half the total industry market cap.
Wipro shareholders have a wealth of Rs 300 billion, Infosys Technologies Rs 250 billion and NIIT Rs 100 billion. Infotech shares remained undervalued and did not catch the market fancy.
The total market cap of the industry was a measly Rs 28.4 billion on March 31, 1997. Most of the fortunes for IT investors have come in the last 12 to 18 months.
While analysts have started wondering is whether the IT rally can sustain. As of now, sentiments are improving by the day.
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