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Govt initiates process for Engineers India Ltd stake sale

The Department of Disinvestment (DoD) will soon appoint merchant bankers to manage 10 per cent stake sale in Engineers India Ltd (EIL) which may fetch Rs 520 crore to the exchequer.

BT Online Bureau   New Delhi     Last Updated: April 16, 2013  | 14:24 IST

The Department of Disinvestment (DoD) will soon appoint merchant bankers to manage 10 per cent stake sale in Engineers India Ltd (EIL) which may fetch Rs 520 crore to the exchequer.

DoD has invited expression of interest from merchant bankers, or singly or as a consortium, with experience in public offerings/OFS to act as book running lead managers and to assist and advise government in the process.

The government had in January decided to offload its 10 stake in the company through public offer. It plans to disinvest 10 per cent stake, or 3.36 crore shares of EIL through Further Public Offering (FPO) in the domestic market.

Up to 5 per cent of the public offering will be reserved for the employees of the company.

At the current market price of Rs 156 apiece, the 10 per cent stake sale could fetch over Rs 520 crore to the exchequer. The paid-up equity capital of the company, as on March 31, 2012 was Rs 168.47 crore.

The government currently holds 80.40 per cent in the Miniratna PSU.

The government proposes to raise Rs 40,000 crore by way of disinvestment in the current financial year. It has already lined up a host of companies, including Coal India, Indian Oil and Hindustan Aeronautics, for stake sale 2013-14.

The government used the Offer For Sale (OFS) route, popularly known as auction method, to divest its stake in PSUs, including Oil India, NTPC and NMDC and Hindustan Copper in last financial year.

EIL stake sale could not be done through the OFS mechanism as the company is already compliant with the Securities and Exchange Board of India's (Sebi) public holding norms. Besides, it is not in top 100 companies in terms of market capitalisation.

EIL is leading provider of design, engineering and project management and consultancy services firm for the hydrocarbon sector. In 2010, the government had divested 10 per cent stake through an FPO in the company.

With inputs from PTI

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