Is BPL Telecom riding high on a case of mistaken identity in the stock markets?

What's in a name you would say, but there's a lot. There seems to be a case of mistaken identity. BPL Limited is a stock, which has run up 50 per cent in the last three days, but it has nothing to do with BPL Mobile, which has applied for telecom licenses in 21 circles.

The BPL Ltd stock has gained basically on the premise of mistaken identity, as it has no connection with BPL Mobile, which has applied for licenses to operate in 21 circles.

BPL Ltd., originally called British Physical Laboratories, is owned by TPG Nambiar and has a subsidiary BPL Telecom. BPL Telecom manufactures telecom sets and EPABX. The company's fundamentals do not justify the run up except for the mix up in name. For FY07, its consolidated net sales are around Rs 202.8 crore. Also, there are net losses in the books of around Rs 70 crore for FY07, and also its FY07 accumulated losses are at Rs 215.5 crore.

As far as BPL Mobile Communications is concerned, Essar had bought a 13 per cent controlling stake in BPL Communications from Rajiv Chandrashekhar, the son-in-law of TPG Nambiar for over Rs 4,400 crore in July 2005. It is the same company, which now under Essar, has applied for telecom licences to operate in 21 circles. (See: Essar files for telecom licence under BPL's name)

The only saving grace for BPL Ltd is that the company has revised its proposal to set up two 300 MW power plants in Andhra Pradesh, which was earlier 520 MW. So, if at all there is one trigger, or could be the trigger, it is the power plant that is going to be set up. Apart from this, there is no relation between BPL Ltd, the listed entity and BPL Mobile Communications.