Govt's 10 pc stake sale in EIL garners Rs 497.3 cr

Written by PTI | New Delhi | Updated: Feb 14 2014, 03:12am hrs
EILThe government has sold over 3.36 crore shares, or 10 per cent stake in the PSU. Reuters
The government will receive Rs 497.3 crore through its 10 per cent stake sale in Engineers India Ltd (EIL).

An Empowered Group of Ministers headed by Finance Minister P Chidambaram today decided to fix the issue price for the EIL Follow-on Public Offer (FPO) at Rs 150 a share, which is the upper end of the price band. A further discount of Rs 6 per piece would be given to for retail investors.

The government has sold over 3.36 crore shares, or 10 per cent stake in the PSU at a price band of Rs 145-150 apiece through an FPO, which was over-subscribed 2.83 times.

"With the issue price being fixed at Rs 150 per share, the Government would receive Rs. 497.3 crore approximately towards disinvestment proceeds," an official statement said.

The government's holding in the company has come down to 70.4 per cent following the FPO.

EIL shares gained 0.29 per cent to Rs 154 at the close on the BSE today, valuing the company at Rs 5,188 crore.

After divesting a 10 per cent stake in EIL in 2010, the government decided in January last year to go in for a further share sale in EIL, a leading provider of design, engineering and project management and consultancy services for the hydrocarbon sector.

Five per cent of the offer was reserved for EIL staff.

The stake sale was managed by ICICI Securities, IDFC and Kotak Mahindra Capital, Edelweiss Financial Services and IDBI Capital.

This is the second follow-on offer from the government 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 had until now raised about Rs 3,000 crore of its disinvestment target of Rs 40,000 crore for the current financial year.