Engineers India FPO oversubscribed

Written by Agencies | New Delhi | Updated: Jul 31 2010, 01:38am hrs
The Rs 977 crore follow-on public offer (FPO) of the state-run Engineers India got an overwhelming response and got oversubscribed 13.14 times by the end of issue today.

The FPO got robust response from all market participants, including retail investors, making the public issue one of the best divestment offers by the government in 2010.

State-run hydro power producer Satluj Jal Vidyut Nigam (SJVN) Ltds initial public offering, the first public issue of a PSU this financial year, was subscribed 6.61 times. EILs public issue is the second divestment offer of the government this fiscal.

The issue has received robust demand from all categories and it shows investor confidence is resuming in the primary market, ICICI Securities CEO and MD Madhabi Puri Buch told PTI.

EILs offer, expected to fetch up to Rs 977 crore to the government, received bids for over 44.27 crore shares against 3.36 crore equities on offer, thereby getting subscribed 13.64 times, as per the NSE data.

In the portion reserved for the qualified institutional buyers, the issue was subscribed 23.4 times. The book for Qualified Institutional Buyers (QIBs) was closed yesterday.

Today was the last day for retail and corporates to apply for the EIL issue, which opened on July 27.

The FPO got subscribed 2.23 times in the portion reserved for retail buyers and 5.83 times in HNI category, according to investment banking sources.

Retail buyers were enthused by an overwhelming response from QIBs. The dedicated one day time for the retail and HNIs helped the issue to atrract heavy demand, she added.

The firm has entered the capital market with 3.36 shares of Rs 5 each in the price band of Rs 270-290 a piece.

ICICI Securities, IDFC Capital, SBI Caps and HSBC Securities and Capital Markets India are the book-running lead managers to the issue.

In the secondary market, however, EIL counter saw selling pressure and on the NSE the scrip ended 2.03 per cent lower at Rs 323.10.

Investors in the FPO would be happy to get EIL shares at a discount from the prevailing market price, Buch added.

The government, which holds a little over 90 per cent in EIL, is selling 10 per cent stake through the FPO.

Incorporated in 1965, EIL is an engineering consultancy company offering services in design and engineering services.

It is focused on the oil and gas, and petrochemical industries in India and abroad.

Allotment of EIL public issue would be done by August 6 and these shares would be listed by August 16, market sources said.