``The company has bagged fresh orders worth Rs 6 crore for providing AMFM and GI services and to implement this, it needs to recruit 150 personnel.

Besides, the company is also setting up additional infrastructure facilities at a cost of Rs 40 lakh. The total cost of the current expansion is around Rs 2 crore and we have decided to take the equity route to finance this,'' said Sanghani. The company has already deployed Rs 53 lakh and the project is expected to be completed by October or November this year, he said. Over the next three years, the company is expected to bag orders worth Rs 20 crore which will be purely value addition, headded.

Ace Software, which exports almost 100 per cent of its products, is expected to announce its results by the end of April. On a Rs 3-crore turnover, the company is expected to announce a net profit of around Rs 75 lakh which is lower compared with the 1998-figure of Rs 78 lakh. However, the fresh orders and the current expansion will see a major spurt in sales income and net profit for fiscal 2000. The company is projecting a net profit of Rs 2-2.5 crore on sales of Rs 6-7 crore for fiscal 2000.

The company is charging a lower premium as the stock is poorly discounted on the bourses. Since its announcement of the rights, the stock has shed nearly 30 per cent on the Bombay Stock Exchange, from Rs 25.7 on March 31 to Rs 17.95 on April 9. The stock is currently trading cum-rights. However, the current fall in the stock price is largely due to the overal poor sentiment on the bourses which again is due to the political stalemate. The shares will go ex-rights on May 21.

The company is issueing oneequity share for every five shares held in the company. Post-issue, the paid up capital of the company will rise from Rs 5 crore to Rs 6 crore. For fiscal 1999, the annualised EPS works out to Rs 1.15. This discounts the offer price of Rs 15 by a multiple of 13 which is high compared with Sonata Software IPO offer at around 11. The EPS of Rs 1.15 discounts the current market price of Rs 17.95 by a multiple of 15.6 times.

The poor discounting is understandable as the company's past performance has not been very impressive. For the nine-month period ended December 31, 1998, the company has recorded net profit of Rs 43 lakh compared with Rs 78 lakh for the entire fiscal 1998. For the nine-month period, the company recorded a sales of Rs 1.8 crore compared with Rs 2.82 crore for the entire fiscal 1998. ACE Software's activity is limited in electronic data base creation, AMFM conversions and GI services. The company has a marketing tieup with US-based Apex Data Services which holds 7 per cent stake in AceSoftware.