INITIAL PUBLIC OFFERINGS PAY OFF : 4 VALLEY COMPANIES RIDING STRONG MARKET.

Byline: Deborah Adamson Daily News Staff Writer

Four San Fernando Valley companies that went public this year have racked up returns ranging from 28 percent to 167 percent in a hot market for new stocks.

Xylan Corp. in Calabasas, Legacy Software Inc. in Northridge, Ocal Inc. in Van Nuys and Kaye Kotts Associates in Sherman Oaks went public in the first five months of 1996. In the like period last year, there were no initial public offerings by Valley firms.

``It is a very strong IPO market,'' said Walter Cruttenden, chairman of Cruttenden Roth, an investment banking firm in Irvine. ``Part of that is the result of the market being at record-high levels. Many companies can get a good price for their stock and they feel it's a good time to go to market.''

As of May 15, 66 California companies went public, raising $2.2 billion, according to the trade publication IPO Reporter in New York. That compares with 30 companies a year ago, which raised $1.5 billion.

Nationally there were 275 deals this year that raised $18.5 billion compared with 138 companies a year ago that raised $6.5 billion.

John Mazzaferro, Xylan's director of corporate marketing, said the company went public a few months earlier than it expected. But ``the shipments were strong and the market conditions seemed ideal to do it,'' he said.

So far the best performer in California is Xylan, a maker of computer switching products. In March it offered 4.2 million shares at $26. The stock closed at 58-3/8 on the first trading day. On Wednesday it closed at 69-3/8, up 167 percent since going public.

Legacy Software, a CD-ROM developer, raised $6 million on 1 million shares. Its stock price closed at $8 on Wednesday, up 33 percent since the IPO.

Ocal Inc., a maker of PVC-coated steel conduits, raised $11 million on 2.2 million shares. Its stock price has risen 28 percent, to close at 6-3/8 Wednesday.

Kaye Kotts, which represents delinquent taxpayers in IRS negotiations, took in $5 million by issuing 1 million shares. Since its IPO, the stock price has gone up by 50 percent to 7-1/2.

Record levels of money flowing into mutual funds are partly fueling the IPO market, said David Kwateng, research director for the IPO Reporter.

``If you have money lying around you need to do something with it,'' he said.

A record $80 million flowed into mutual funds in the first quarter, according to the Investment Co. Institute, a trade group in Washington. About $70 billion went into stock funds alone, compared with $21 billion a year ago.

But this frenzied environment means that bad and good IPOs find it easier to go to market, Kwateng said.The mixture of lower-quality IPOs dragged down the average performance in the secondary market, he said. This year's crop showed a 24 percent average gain in stock price after their offerings, compared with 31 percent a year ago.

GOING PUBLIC Stock IPO date Offering Price Wednesday's Close Pct. Chg.

Xylan March 11 26 9-3/8 167%

Legacy May 14 6 8 33%

Ocal March 13 5 6-3/8 28%

Kaye Kotts Feb. 22 5 7-1/2 50%

CAPTION(S):

Chart

Chart: GOING PUBLIC (See text)