Engineers India FPO opens on bourses; shares up 2%

Sale of 3.37 crore shares or 10% stake could fetch around Rs 500 crore to the exchequer

The follow-on-public offer (FPO) for 10% stake sale in Engineers India (EIL), which is expected to garner Rs 500 crore to the exchequer, opened today.

The shares are being offered at a price band of Rs 145-150 apiece and the issue would remain open till February 10. The FPO would remain open on bourses between 10 am and 5 pm.

Shares of EIL touched a high of Rs 152.15 in early trade, up 2.14% over the previous close. The scrip was trading at Rs 150.30, up 0.91% in the morning trade on the BSE.

The sale of 3.37 crore shares or 10% stake could fetch around Rs 500 crore at the upper end of the price band.

EIL said a discount of Rs 6 a share will be offered to retail investors and employees. The government plans to reserve 5% of the offer for employees.

The company's order book as of September 2013 stood at Rs 3,232 crore.

The government holds 80.4% in the 'miniratna' public sector undertaking. In 2010, it had divested 10% of its stake in EIL through an FPO.

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% 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.