The BFL Software scrip continues to rise on the bourses. On Monday, the scrip hit the upper-end of the circuit-filter and the counter saw 1.83 lakh shares changing hands. The rise in the scrip price remains a mystery given the net loss of Rs 10.75 the company incurred in fiscal 1997-98 compared with a profit of Rs 6 crore last year.

At present, Baring India holds 51.85 per cent in BFL Software. Undaunted by the poor public response to its initial offer, Barings has acquired 15.04 lakh shares (i.e., 15.04per cent of the total paid-up capital) of BFL Software at Rs 135 per share through a negotiated deal. Rumours have it that the Bangurs have offloaded some more shares in favour of Barings India.

The current offer is subject to Baring India obtaining aprroval from the Reserve Bank, the Foreign Investment Promotion Board (FIPB) and the Secretariat of Indiustrial Approvals (SIA) for increasing its stake in BFL Software to 72 per cent. Barings had earlier obtained FIPB approval for acquiring up to 65 per cent stake in BFL Software.

BFL Software, which was trading at around Rs 50-55 on BSE, sudddenly caught the fancy of investors after news broke out that the cash-strapped Bangurs were in talks with two foreign buyers to offload 25 per cent stake. The scrip zoomed to over Rs 400 as it became clear that ING Barings was close to clinching a deal to acquire majority stake In BFL Software. The market felt that the acquisition would enhance the BFL's profile in the global market and open up new vistas for thecompany in Europe where the ING group is well-known.

For fiscal 1998-99, BFL Software incurred a loss of Rs 10.75 crore mainly on account of the high expenditure cost. According to the company, the total expenditure of Rs 54 crore includes provision for doubtful advances and deposits.

Interest cost also doubled to Rs 2.62 crore. Despite the net loss, the company still enjoys a good discounting in the market.