As the company announced the Rs 6.96-crore rights issue, the stock started trading again. The stock, which was last traded in March, 1999, started trading at Rs 26 on August 17 and fell by Rs 2 to Rs 24 on the following day.

The promoter, Sunil Bharti Mittal, has a 72.55 per cent stake in the company. In order to see the rights issue through, the promoter is subscribing to additional shares, if there is any shortfall in subscription.

Bharti Healthcare, a sick company, has been hit by high interest cost. The interest burden has shot up by 432 per cent from Rs 62 lakh in fiscal 1998 to Rs 3.33 crore in fiscal 1999. The rising interest cost has taken a heavy toll on the company's bottomline. Although Bharti Healthcare recorded an operating profitof Rs 3.4 crore, higher interest cost has seen the company recording a net loss of Rs 1.76 crore for fiscal 1999. Total sales rose from Rs 14.84 crore in 1997-98 to Rs 17.69 crore in 1998-99.

For the first quarter of the current fiscal, the company recorded a net loss of Rs 42 lakh on sales of Rs 5.08 crore. However, the company continues to bear the burden of high interest cost. Against an operating profit of Rs 88 lakh for the first quarter, interest burden stood at Rs 42 lakh. As a result, the company incurred a net loss of Rs 42 lakh.

As the rights issue is in the ratio of 1:1, the paid up capital will double from Rs 2.32 crore to Rs 4.64 crore. The proposed rights issue is part of a rehabilitation plan. The rights proceeds will be used for repaying outstanding unsecured loans against fully convertible debentures. The FCDs were raised over a period of time from the promoter/group companies. The company has a total borrowings of Rs 26.83 crore.

In order to revamp the company, Bharti Healthcare willbe paying the entire outstanding principle and 25 per cent of interest due and accrued upto December 31, 1992. The company manufactures hard gelatine capsule shells with an installed capacity of 900 million pieces per annum. The company derives a major part of its income from sales to pharmaceutical manufactures and formulators.