Punjab Communication surged on huge buying support on Wednesday, following reports that the Punjab government will take a final decision on the company's privatisation later this week.

The stock of the telecom equipment firm jumped by 10.60% to Rs 70.40 on the BSE in early-afternoon trades. A relatively higher volume of over 207,000 shares was recorded on the counter by 12:30 IST.

The stock rallied purely on reports that the government of Punjab will take a decision to offload its 70% equity stake in the company on Saturday (22 February 2003).

The state government has appointed SBI Capital Market as its financial advisor for the sell-off programme.

Punjab Communications was incorporated in July 1981 by the Punjab State Electronics Development and Production Corporation to manufacture direct-to-line multiplexing equipment. Later, it diversified into the production of pulse code modulated multiplexers, trans multiplexers, voice frequency telegraphs, rural automatic exchanges, digital VHF radios, etc. The major users of these products are BSNL, ONGC, VSNL, Railways, defence sector etc.

For the third quarter ended 31 December 2002, Punjab Communications registered a loss of Rs 11.68 crore, compared to a net profit of Rs 2.03 crore in the corresponding period of the previous year. Net sales also dropped by 78.6% to Rs 8.95 crore from Rs 41.79 crore in DQ 2001.

As on 31 December 2002, the public and institutions held 24.92% and 1.45% stake in PCL respectively.