Expectations of a turnaround in fiscal 1999-2000 (on the back of an expected increase in offtake of its products) has triggered off fresh buying interest at the counter in the Bombay Stock Exchange. The stock has more than doubled its value since September 30.

From the Rs 20-25 level a month ago, the stock has touched a new high of Rs 51.6. On Monday, the scrip went ex-rights on BSE at Rs 43.30 and continued with its northward journey on Tuesday, closing at Rs 46.75. With operators flocking to the counter, volumes have been on an uptrend with over one lakh shares traded daily. On November 15, over 3.12 lakh shares changed hands at the counter. For Electrolux, the new-found punter interest translates into a double bonanza.

With the scrip scaling new highs daily, the forthcoming rights issue (likely to open in December) at par should receive an encouraging response from the shareholders. The success of the Rs 68.09 crore rights issue is important as the proceeds will be used to improve the company's networth. As on March 31, 1999, accumulated losses of Electrolux stood at Rs 84.28 crore (over 50 per cent of the company's net worth has been eroded). Apart from a strengthening of the balance-sheet, punters also seem to be enthused by the decision of the Swedish promoter to hike its stake in the Indian arm from the current 56 per cent to 74.2 per cent.

The company, which has been incurring losses for many years due to a sizable investment in capacity expansions, can now take solace from the fact that it can now reap the economies of scale. The expansion has been completed and the company is now striving towards improving its production efficiency. In the first-quarter of the year 2000, Electrolux came out of the red with a profit of Rs 1.19 crore against a loss of Rs 2.78 crore in the corresponding period last year.