The company's board is scheduled to meet on January 4, 1999 to decide the date of holding the EGM and also to finalise the agenda for the EGM. The agenda as sent by the company to various stock exchanges says that the company would seek shareholder approval for increasing the investment limit of foreign institutional investors from 24 per cent to 30 per cent and 10 per cent for overseas corporate bodies and non-resident Indians.

Further the company has also decided to seek approval for making preferential allotment to foreign institutional investors, NRIs, financial institutions, pension funds, private equity funds, mutual funds, corporates etc either Indian or foreign parties. The EGM would also be called to seek shareholders approval for investments in wholly owned subsidiaries, jointventures and acquisitions in India or abroad.

While the stock was already quoting at a premium of over 5 per cent to its day's low, the news of the company's meet added fuel to the rally. After the announcement which was flashed by the exchanges at around 2.15 pm, the stock surged by over 8 per cent to be locked at the day's circuit level of Rs 717.15 on the NSE. The market was agog with rumours that the company may consider a bonus issue as well, despite the fact that the company in its letter to the exchanges did not mention about the bonus issue.

It may be recalled that the company's turnover as on March 31, 1998 was pegged at Rs 291 crore, with the profit marked at a high of Rs 68.36 crore a rise of over 40 per cent to the profit of Rs 46.94 crore as reported by the company on March 31, 1997.

Interestingly, the cash flow from net operating business rose from Rs 2 crore in 1997 to a high of Rs 89 crore. Considering the performance of the company and the equity base which is currently pegged at Rs 17crore, the market was agog with rumours that a bonus issue is on the cards.

While a great deal of institutional ware-housing was reported at the counter, it also mirrored in the steady rise of volumes at the counter. The counter clocked a phenomenal volume of over 65 lakh shares on the local bourses. Interestingly, the stock closed on the BSE at Rs 708.25, while on the NSE the stock closed at a premium of Rs 9, at Rs 717.15. According to market observers the higher price on the NSE was symbolic of the rising short positions at the counter. While the short positions of Pentafour were pegged at Rs 2.30 lac, the long positions were higher at Rs 5.89 lac on Monday evening as reported by the BSE. The stock was traded at a premium of Rs 3 at the kerb at Rs 720 against the NSE's closing of Rs 717.15.

However, analysts continued to cite the huge expenditure of Rs 160 crore for the purchase of fixed assets, as reported by the company as a problem area.