Bids were received for over 3.97 crore shares, or 1.18 times the 3.36 crore shares on offer, as of 1700 hrs today. The portion reserved for qualified institutional investors was oversubscribed 2.6 times.
The shares are being offered at a price band of Rs 145-150 apiece and the issue closes on Monday.
The share sale, which saw a lukewarm response yesterday, gained traction today as bids from institutional buyers came in. The sale could fetch about Rs 500 crore at the upper end of the price band.
EIL shares closed at Rs 152.25 on the BSE, up 0.59 per cent, after touching an intra-day high of Rs 153.50.
The government holds 80.4 per cent in the 'miniratna' public sector undertaking and had divested a 10 per cent stake in the company in 2010.
In January last year, the government decided to go in for further disinvestment in EIL, a leading provider of design, engineering and project management and consultancy services for the hydrocarbon sector.
Chairman and Managing Director A K Purwaha had said the company is eyeing business expansion in Africa and Latin America. Its had an order book of Rs 3,232 crore as of September 2013.
EIL said a discount of Rs 6 a share will be offered to retail investors and employees. The government has reserved 5 per cent of the offer for employees.
The Department of Disinvestment had held overseas roadshows to attract foreign investors to the stake sale, which is being managed by ICICI Securities, IDFC and Kotak Mahindra Capital, Edelweiss Financial Services and IDBI Capital.
This is the second disinvestment through a follow-on offer in the current financial year. In December, the government sold 4 per cent in Power Grid Corporation of India, which fetched the exchequer over Rs 1,600 crore.
The government has raised about Rs 3,000 crore of its disinvestment target of Rs 40,000 crore for the current financial year.