Will bonus bug bite other IT firms?

Both Infosys and Satyam have announced plans for considering bonus issues in their forthcoming board meetings. The Infosys board will consider the bonus issue on April 14 and Satyam has scheduled its board meet on April 21.

The last time Infosys announced a bonus issue was at the end of June quarter in 2004. The company generously gave away three free shares for every share held. It had given bonus in the ratio of 1:1 in 1994, 1997 and 1999.

This time too, shareholders expect a liberal bonus from the company. Satyam last issued bonus shares after the June quarter results in 1999.

The bonus ratio was 1:1 "" one free share for every share held. Wipro was very generous in announcing bonus shares, with bonus shares in the ratio of two shares for one held in 2004 and again bonus shares in the ratio of 1:1 in 2005.

A glance at the table "" indicating reserves as a multiple of paid-up equity "" shows Satyam right at the top followed by Infosys having surplus reserves compared with their paid-up equity capital.

Other strong candidates include Patni Computers with reserves of Rs 758 crore - a multiple of more than 30 times its paid-up equity of Rs 25 crore. Patni had issued bonus shares of 1:2 prior to its public offer in February 2004.

i-flex Solutions had given bonus shares in 2003 in the ratio of 1:1. The company with general reserve of Rs 873 crore and equity capital of Rs 37.44 crore could also be a candidate to give away bonus shares. TCS went public in 2004 flush with general reserves of over Rs 1,200 crore on an equity base of Rs 48.93 crore. 
 

RIPPLE EFFECT
Rs crore	Equity capital 2004-05	Reserves 2004-05
Infosys Tech.	135.29	4200.79
Wipro	140.71	3762.43
Satyam Computer	63.85	2261.43
TCS	48.01	1206.36
HCL Technologies	63.84	1092.37
GTL	74.13	993.59
i-Flex Solutions	37.44	873.11
Patni Computer	25.00	758.14
HCL Infosystems	33.44	310.53
NIIT	19.33	243.80
VisualSoft Tech.	19.98	199.91
Aftek Infosys	15.00	190.77
CMC	15.15	159.95
iGate Global Sol	11.72	131.87
Sonata Software	10.52	105.38
Reserves include general reserve and amount  transferred from the P&L A/C at the end of  previous fiscal