Three mutual funds are believed to have picked up around 10 per cent stake in the Delhi-based Archies Greetings & Cards Limited at a price in the range of Rs 100-170. According to sources, SBI Mutual Fund, Birla Capital and 20th Century have acquired equity in the range of 1.5 to 2 per cent each in the company's low equity base of Rs 3.24.

A few institutions too have been vying for huge chunks of Archies' shares and have offered a price much higher than the current prevailing price. Some FIIs have also shown interest in picking up huge chunks of the stock at a premium to the current price. But the institutions and FIIs have not been able to pick up the desired quantity as a result of the low floating stock.

According to market sources, some institutions have even offered aprice upwards of Rs 225-250 for an Archies' stock. A distribution network of over 310 franchises, 25,000 retail outlets, 70 distributors and a strong brand value seems to have attracted the institutional investors. In order to improve its liquidity, the company is seeking listing at the National Stock Exchange (NSE).

A company official confirmed that the company's stock would be listed on the NSE in the next three to four months. A low equity base of Rs 3.24 crore and almost 67 per cent stake with the promoters coupled with listing at DSE only has rendered the scrip illiquid.

For a scrip to get listed on the NSE, the stock needs to have a minimum capitalisation of over Rs 40 crore during the past six months. At around Rs 90, three weeks ago, Archies had a market capitalisation of less than Rs 30 crore. The smart rise in the scrip price has paved the way for the company's listing on NSE.

The company completed a successful 1997-98 when its turnover rose by 35 per cent to Rs 46 crore and net profit zoomedby over 90 per cent to Rs 4.75 crore. Archies managed to record a compounded annual growth rate (CAGR) of over 30 per cent in sales and around 72 in net profit for the past three years. The projections for the current fiscal are a net profit of around Rs 6 crore, which will yield an earning per share of over Rs 19.

The completion of the expansion project, an increase in the number of franchise outlets and a foray into music have helped Archies clock a higher turnover.

After paying off all its bank liabilities, the company has now become a zero-debt company. The drop in interest cost from Rs 25.13 lakh to Rs 8.51 lakh aided the surge in net profit. Archies also plans to tap more overseas markets, especially those regions which have a large Indian population. The tie-up with Gibsons Inc. and American Greetings Corporation seems to have given the company the quality edge. Archies has recently tied up with Portal Publications, USA, for their range of cards, posters, etc.