Market players rallied around Punjab Communications ahead of a crucial meeting of the Punjab government over the company's privatisation.

The scrip of the telecom equipment company jumped 4.48% to Rs 81.70. It had touched a 52-week high of Rs 83.90 earlier. The low recorded today on the counter was Rs 77. Relatively high volumes of over 162,000 Punjab Communications shares were registered on BSE by 11:25 IST on Tuesday.

Punjab Communications has grown 170% from its 52-week low of Rs 31.05 on 15 March 2002 to its 52-week high of Rs 83.90 today. The solid surge was sheerly on privatisation prospects.

The government of Punjab will take a decision on offloading its 70% equity stake in the company on Thursday (6 March 2003). The meeting had been postponed from 22 February 2003 earlier.

The company's privatisation was in fact held back for some time to safeguard the interests of employees. Labour unions had requested for introduction of a voluntary retirement scheme before the ownership was transferred to a private party.

The state government has appointed SBI Capital Market as its financial advisor for the sell-off programme.

Punjab Communications 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, the 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.

As on 31 December 2002, the public and institutions held 24.92% and 1.45% stake in PCL respectively.

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