Sri Vijayadurga Investments and Agencies Pvt Ltd and some persons associated with the company have made an offer to acquire 6,16,110 shares, representing 43.36 per cent of KCSL's Rs 1.42 crore equity at Rs 17.50. The open offer price is at a 46 per cent premium to the KCSL scrip's last traded price of Rs 12 on the BgSE.

However, some shareholders in the company think that the offer price is unusually low. Given that the infotech industry is experiencing a boom at present, there are good prospects of appreciation in the scrip. They also think that the open offer priceshould have been higher as the company's current book value is Rs 23.99 which makes the offer price at a discount of 27 per cent. KCSL's earnings per share (EPS) for fiscal 1998 works out to Rs 5.40, up from its fiscal 1997 EPS of Rs 5.09.

KCSL is primarily engaged in the business of computer peripherals and devices industry. This industry, unlike the pure software industry, is a high volume-low margin industry. The company's net profit margin during fiscal 1998 went down to 2.48 per cent from 3.47 per cent the previous fiscal.

Moreover, the premium section of this industry is dominated by established and big players. So the future prospects of the company is dependent on whether KCSL enters the highly profitable software business or not and how soon. During fiscal 1998, KCSL earned a net profit of Rs 76.66 lakh from a total income of Rs 31.12 crore. While its total income had grown 54 per cent over its fiscal 1997 total income of Rs 20.27 crore, net profit growth was only 6 per cent.

The company has aconsistent dividend payment record during the last three fiscals - 20 per cent, 22 per cent and 25 per cent during fiscals 1996, 1997 and 1998, respectively.