But, for reasons best known only to the promoters and the merchant bankers, the Mumbai-based SPCL chose to list its share initially at Pune (PSE) and Hyderabad (HSE).

If a company source is to be believed, in a few months' time, the scroreip would be listed on BSE too. The `listing amendment' made by BSE on March 31, 2000, stipulates that any existing company listed on any other stock exchange now seeking listing on BSE should fulfill the following:

1) The company should have a profit making record for at least three years.
2) Minimum market capitalisation of the listed capital of the company should be Rs 20 crore, based on the average price of last six months.
3) Number of days traded during last six complete months should be minimum 50per cent of the total trading days during the same six months on any stock exchange.
4) Minimum average volume traded per day during the last three complete months should be 1,000 shares and minimum 5 trades per day.
5) Minimum 25per cent of the company's issued capital should be with public (inclusive of bodies corporate) and minimum 15 shareholders per Rs 1 lakh of capital in the public category.
6) The company should be agreeable to sign an agreement with CDSL & NSDL for demat trading etc.

Operationally, SPCL has been making profits since 1993-94. Of its issued capital of Rs 10 crore, 25per cent is with the public, and there are more than 25 shareholders for every Rs 1 lakh of the company's public capital. The company has also agreed to trade its shares in the electronic form. Thus, it has already fulfilled BSE's first, fifth and sixth condition for listing. However, in order to fulfill the second condition, the share should at least quote not less than Rs 20 for a period of six months in any of the two exchanges that it has been listed. And, to satisfy the third and the fourth condition, SPCL should trade at least for 65 days between June and November in any of the two stock exchanges, and its average daily volume and number of trades during the period September to November should be not less than 1000 and 5 respectively.

Will SPCL be able to satisfy the BSE listing norms in the coming six months? Had the euphoria that prevailed in early this year continued, the company could have effortlessly completed the mission. But, certainly not under the present circumstances.

Though SPCL is claimed to have been listed on its `regional' exchange (PSE) since May 3, it has hardly attracted any quote in first seven days. On HSE, the scroreip opened its account this Wednesday with a fractional premium of 70 paise and closed the day at Rs 10.40, volume and number of trades being only 1000 and 2 respectively. The next day, the scroreip went into oblivion on HSE too.

How come a `pharma issue', which was subscroreibed more than three times barely a couple of months ago, finds no buyer now? A plausible reason could be that investors were wary of SPCL's main promoter scoring a `hat trick'! Though SPCL's offer document claimed that there were no companies which were promoted by the same promoters, the fact is, the practicing chartered accountant-turned-promoter-managing director of SPCL, Mohan P Kala, was also claimed to be one of the promoter-directors of Kilitch Drugs Ltd when the company went public during the 1994/95 primary market boom. Kala had also joined hands with the promoters of Veronica Laboratories Ltd by picking around 2per cent stake in Veronica when it went public in early 1995.

Incidentally, for all the three public issues that Kala has associated with, Intime has acted as issue registrars. While both Kilitch and Veronica hired the Mumbai-based Indbank and BoB as lead managers, SPCL appointed the Chennai-based Allsec Financials as its issue manager. Post-issue, whereas the Rs 10 paid-up scroreip of Veronica hit a low of 90 paise in 1997, Kilitch's share price went down to 75 paise in 1998. Last year, both the scroreips witnessed a massive rally and recorded a peak of Rs 88 and Rs 22 respectively.

But, in the absence of any croreeditable financial performance to support the rally, Veronica has subsequently receded to less than Rs 38 while Kilitch has croreashed to Rs 4.

Now, what are the prospects for SPCL's scroreip? SPCL's equity base is relatively large at Rs 10 crore as against its last audited full year (1998-99) profit of Rs 27 lakh which gives an EPS of only 27 paise! Also, as against such a large capital, the company's own manufacturing generated a turnover of just Rs 2.14 crore in the year ended June 1999, and the company's gross block amounted to only Rs 3.04 crore at the end of October 1999.As a matter of fact, SPCL is still predominantly a trading company.

Interestingly, such a low asset based company has proposed to set up a Rs 2.18 research & development project, utilising the public issue proceeds of Rs 2.5 crore! What's more, the company has had four auditors in as many years!! With such croreedentials, what can SPCL offer to the investors in the long run?

-- (Arranged by Investar - The Aarthik News & Research Group) [E-mail feedback to:investar@bol.net.in (or) fernando@bol.net.in] .rm90