The company is making the preferential offer of 28.5 lakh shares amounting to Rs 34.2 crore in order to fund the acquisition of Mindteck Consulting Inc, a US based software company.

While the Rs 12.5 crore rights issue, likely to hit the market in November, is being planned in the ratio of 1:4 at Rs 100 share for meeting the capital expenditure and working capital requirment, the sources said.

Present paid-up capital of the company is Rs 5 crore and after the rights issue it will go upto Rs 6.25 crore and following the preferential issue it will further rise to Rs 9.1 crore.

Preferential issue is made at a premmium of 80 per cent and the rights at 50 per cent to the Monday's closing price of Rs 66 on the BSE.

Board of the company has already approved the preferentiul issue last week and it would be seeking shareholders approval to the proposed acquisition and preferential issue in its forthcoming Annual General Meeting (AGM) scheduled on November 16. Following the approval from shareholders, the company will seek the approval of Foreign Investment Promotion Board (FIPB) and Reserve Bank of India (RBI) for bringing in the foreign capital to fund the acquisition.

From last year Mindteck embarked upon an organisational restructuring following the continuous losses and as part of the plan, it had shifted its focus from distribution of medical equipment and graphic software to a pure software company. This was primarily due to existing promoters divesting their stake in the company to Embtech Holdings Ltd, a company registered in Mauritus and part of Taib Bank of Bahrain, which holds almost 72 per cent in the company.

Following the restructuring big investors like Pradip Shah of IndAsia Ventures also took stake in the company. With the entry of new investors and focus on the new business, the company has turned around and for the first quarter ended September 2000, it reported a net profit of Rs 84.81 lakh on revenues of Rs 2.45 crore.