The issue received bids for over 6.33 lakh shares, accounting for 0.02 per cent of over 3.36 crore shares on offer till 1600 hrs today.
Shares are being offered at a price band of Rs 145-150 apiece and the issue would remain open till February 10. The sale of over 3.36 crore shares or 10 per cent stake could fetch around Rs 500 crore at the upper end of the price band.
Shares of EIL touched a high of Rs 153.30 intra-day before closing at Rs 151.35 on BSE, up 1.61 per cent from its previous close.
Engineers India CMD A K Purwaha told reporters that the company is eyeing business expansion in Africa and Latin America.
The company's order book as of September 2013 stood at Rs 3,232 crore.
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.
"Government has taken a longer term view in pricing EIL shares. It is a process driven disinvestment and not a fire sale of shares," Joint Secretary in the Disinvestment Department Sangita Choure said.
She exuded confidence that EIL shares would rally after the close of the share sale offer.
EIL said a discount of Rs 6 a share will be offered to retail investors and employees. The government plans to reserve 5 per cent of the offer for employees.
In January last year, the government decided to go in for further disinvestment in EIL, which is a leading provider of design, engineering and project management and consultancy services for the hydrocarbon sector.
The Department of Disinvestment has already held overseas roadshows to attract foreign investors to the EIL stake sale.
The stake sale is being managed by ICICI Securities, IDFC and Kotak Mahindra Capital, Edelweiss Financial Services and IDBI Capital.
This is the second disinvestment through FPO in the current fiscal. In December, the government had sold 4 per cent of its stake in PGCIL which fetched over Rs 1,600 crore to the exchequer.
The government has set a disinvestment target of Rs 40,000 crore in the current financial year. So far, it has raised about Rs 3,000 crore through PSU stake sales.