EIL mulls 10% stake sale
New Delhi (PTI): The Department of Disinvestment (DoD) will soon appoint merchant bankers to manage 10 per cent stake sale in Engineers India Ltd...
The 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 plans to disinvest 10 per cent stake, or 3.36 crore shares of EIL through Further Public Offering (FPO) in the domestic market.
At the current market price of `156 apiece, the 10 per cent stake sale could fetch over `520 crore to the exchequer. Up to 5 per cent of the public offering will be reserved for the employees of the company.A Government currently holds 80.40 per cent in EIL, a Miniratna PSU In 2010, it had divested 10 per cent stake through an FPO in EIL
In January, the government had decided to offload its 10 stake in consultancy major EIL through public offer. The paid-up equity capital of the company, as on March 31, 2012 was `168.47 crore.A EIL is leading provider of design, engineering and project management and consultancy services firm for the hydrocarbon sector.
EIL stake sale could not be done through the Offer For Sale (OFS) mechanism as the company is already compliant with market regulator Sebi's public holding norms. Besides, it is not in top 100 companies in terms of market capitalisation.
The government used the OFS route, popularly known as auction method, to divest its stake in PSUs, including Oil India, NTPC and NMDC and Hindustan Copper in last fiscal.