In the last 18 months, stocks of some of the infotech companies like Infosys Technologies Limited, Tata Infotech Limited, Satyam Computer Services Limited and Mastek Limited have appreciated over 300 per cent in market capitalisation. But the figures still do not induce banks to fund working capital requirements. To make matters worse, compared to the US, the number of venture capital financed software companies is very low. This is despite India being the preferred country for outsourcing software development. The problem regarding financing is the lack of understanding of the software business.
Banks still seek collateral for funding working capital requirements.