"EGoM has decided to clear the FPO of EIL. Ten per cent equity will be divested through an FPO. We are looking at around close to Rs 500 crore," Disinvestment Secretary Ravi Mathur told reporters here.
The Department of Disinvestment has already held overseas roadshows to attract foreign investors to the EIL stake sale.
"We can give a definite timeline for the issue after we receive approval from the Registrar of Companies tomorrow," Mathur said.
The Empowered Group of Ministers (EGoM) on disinvestment is headed by Finance Minister P Chidambaram.
EIL shares closed at Rs 146.65, down 3.35 per cent, on the BSE Sensex
, valuing the company at Rs 4,941 crore.
The government plans to disinvest 3.36 crore EIL shares, with up to 5 per cent of the offer reserved for employees.
ICICI Securities, IDFC and Kotak Mahindra Capital, Edelweiss Financial Services and IDBI Capital are managing the disinvestment.
The government holds 80.4 per cent in the 'miniratna' public sector undertaking. In 2010, it had divested 10 per cent of its stake in EIL through an FPO.
In January last year, the government decided to go in for further disinvestment in the consultancy major.
EIL is a leading provider of design, engineering and project management and consultancy services firm for the hydrocarbon sector.
The government plans to raise Rs 40,000 crore by way of disinvestment in the current financial year. So far, it has raised about Rs 3,000 crore through PSU stake sales.