Punjab Communications continued upward on Thursday, after surging 20% on Wednesday, on reports that its divestment will be completed shortly.

The scrip of the Punjab state-run telecommunications equipment provider climbed 3.4% to Rs 79 on BSE in mid-morning trades . It hit a high of Rs 80.35. The scrip clocked solid volumes of 150,000 shares on BSE in morning trades.

Divestment expectations are driving the scrip upwards. On Wednesday, the scrip rallied 20% to Rs 76.35 on heavy volumes of 519,000 shares. From Rs 53.20 on 12 February 2003, the scrip has surged a whopping 48% to the current Rs 79.

As per reports, the divestment of Punjab Communications is expected to be completed by 10 March 2003. Punjab State Electronics Development and Production Corporation holds a 69.7% stake in PCL. PSEDPC had invited preliminary bids for that stake in August 2002. It will now invite financial bids.

The sell-off process of PCL was held back for some time to safeguard interests of employees. Labour unions had requested for introduction of a voluntary retirement scheme before the ownership was transferred to a private party. Even bidders had reportedly supported the VRS idea.

The state government had set a net worth of at least Rs 100 crore ($20.56 million) for bidders in the divestment.

PCL was incorporated in July 1981 by the Punjab State Electronics Development and Production Corporation to manufacture direct-to-line multiplexing equipment. Later, it diversified into the production of pulse code modulated multiplexers, trans multiplexers, voice frequency telegraphs, rural automatic exchanges, digital VHF radios, etc. The major users of these products are BSNL, ONGC, VSNL, Railways, defence sector etc.

For the third quarter ended 31 December 2002, Punjab Communications registered a loss of Rs 11.68 crore, compared to a net profit of Rs 2.03 crore in the corresponding period of the previous year. Net sales dropped by 78.6% to Rs 8.95 crore from Rs 41.79 crore in DQ 2001.