As a result, the scrip of the Punjab-based tractors maker jumped 4.64% to Rs 136.40 by 10:20 IST on BSE in morning trades. A total of 5,776 Punjab Tractors shares were traded on BSE by then.

As per reports, the Punjab government, that had invited bids last December for the strategic sale of its 23.5% holding in the company as part of its divestment drive, is expected to offload stake by mid-July 2003. In fact, there were reports (earlier) that the divestment would be completed by May 2003.

PTL's divestment has received strong response with a number of companies including some domestic and foreign tractor majors putting in initial bids. Substantial interest has been generated over PTL as a result of its being a leading player in the tractor industry in the north and the second largest tractor maker in India after Mahindra & Mahindra. Thus, an acquisition of PTL would automatically promote the acquirer into the front ranks of the Indian tractor segment.

After receiving an overwhelming response from leading companies for the divestment of PSIDC's 23.4% stake in PTL, the core group of officers in the Directorate of Disinvestment has asked 10 short-listed companies to sign agreements of confidentiality. These companies include Mahindra & Mahindra, Escorts, Sonalika, New Holland, Tafe in league with Agco, SAME, FIIs Warburg Pincus, J P Morgan and CDC and a consortium led by NewBridge Llc, a private US equity fund.

Market talk has it that the state government has pegged a reserve price of about Rs 211 per share. The reserve price is the minimum price below which the government will not sell stake.

PTL is currently witnessing difficult times due to sluggish demand and inventory pile up, which have adversely affected its financial performance in the current year. For Q4 ended 31 March 2003, PTL reported a sharp 55.9% fall in net profit to Rs 7.50 crore compared to Rs 17.02 crore in Q4 March 2002. Total income decreased 42.3% from Rs 196.87 crore (Rs 1.96 billion) in MQ-02 to Rs 113.50 crore (Rs 1.13 billion) in MQ-03.

For FY 2002-03, PTL's net profit plunged 57.7% to Rs 42.30 crore from Rs 100.02 crore (Rs 1 billion) in FY 2002. Total income decreased from Rs 892.07 crore (Rs 8.92 billion) in FY 2001-02 to Rs 549.60 crore (Rs 5.49 billion) in FY 2002-03.

Reserve Bank of India had earlier granted its approval for the proposal to hike the foreign fund investment limit in PTL to 64% of total equity from 30%.

As on 31 March 2003, the public, institutions and foreign bodies held 18.70%, 46.15% and 8.16%, respectively in PTL.

BSE code: 500344