Govt raises Rs 637 cr via EIL stake sale

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The government on Friday raised Rs 637 crore through 10% stake sale in Engineers India (EIL), with the offer for sale getting subscribed 2.54 times.

The OFS for sale of over 3.36 crore shares drew enthusiastic response from both institutional and retail investors.
More than eight crore bids were received for the stake sale, against 3.36 crore shares on offer. Institutional investors bid for 5.91 crore shares, against 2.69 crore shares on offer. The portion was subscribed close to 2.2 times.

The retail book was subscribed 3.9 times as individual investors bid for 2.64 crore shares against 67.38 lakh shares on offer.

The government currently holds 69.37% stake  in Engineers India. The company provides engineering and construction consultancy, particularly in the hydrocarbon space.

SBICap Securities, ICICI Securities, Edelweiss Securities and Deutsche Equities India are the book running managers for the stake sale.

Shares of Engineers India closed 0.5% lower at R193.05 apiece on Friday. Amid volatility in global markets, the public sector undertaking’s shares have declined close to 23% since the beginning of the calendar 2015.

This stake sale is a part of the government’s push to meet its FY16 disinvestment target. The government has raised Rs 12,700 crore through PSU disinvestments in the current fiscal so far against the Budgeted target of Rs 69,500 crore.

As per FY16 Budget outline, Rs 41,000 crore was to come from minority stake sale in PSUs and another Rs 28,500 crore from strategic stake sale. Due to volatile stock markets, the government has been able to sell stake only in four PSUs — Indian Oil, REC, PFC and Dredging Corp.

According to media reports, the government is planning to divest its stake in four PSUs — Bharat Heavy Electricals, National Aluminum Company, Coal India and National Mineral Development Corporation.

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