Engineers India's share sale subscribed 2.5 times

Engineers India's offer for sale (OFS) on Friday got subscribed 2.5 times, helping the government raise Rs 630 crore as disinvestment proceeds. The Centre had put on the block 10 per cent of its stake in the engineering firm, which primarily operates in the oil & gas sector. The share sale saw bids for 86 million shares against 33.7 million on offer. Most bids came in at Rs 190.6 a share against the base price of Rs 189 apiece set by the government. Shares of Engineers India closed at Rs 193 apiece on Friday, down 0.52 per cent from the previous close.

The retail portion of the OFS was subscribed nearly four times, while the general category was subscribed 2.2 times. A fifth of the issue was reserved for retail investors, who will be offered shares at a discount of five per cent to the allotment price in the general category.

Mridul Mehta, executive vice-president, ICICI Securities, said, "The issue saw participation from all categories of investors including mutual funds, insurance companies and even foreign investors. The OFS was successful despite the market conditions."

Shares of Engineers India are down 20 per cent so far in 2016 compared to a five per cent decline in the benchmark Sensex. The government has raised Rs 13,300 crore by divesting stake in five public sector undertakings (PSUs) so far in the current financial year. These include Indian Oil, Power Finance Corporation and Rural Electrification Corporation. Among them, Indian Oil stake sale has mopped up the highest money, at Rs 9,370 crore.

The government had initially set a target of Rs 69,500 crore for PSU disinvestment in FY16. However, the decline in the markets forced the government to defer some of its key divestments. In the last financial year, the Centre had raised around Rs 24,000 crore against a target of Rs 40,000 crore.