Engineers India FPO to open on 6 February

The government is selling  10-per cent stake in Engineers India Ltd (EIL) in a follow-on public offer (FPO), to raise around Rs500 crore. The FPO will hit the capital market on 6 February, a government official said.

Engineers India FPO to open on 6 February"The FPO will open on February 6. It will remain open for three days," petroleum secretary Vivek Rae said, adding that the price band will be disclosed after the close of market hours today.

The decision to offload 10 per cent of the `Miniratna' PSU's equity was taken at a meeting of the empowered group of ministers headed by finance minister P Chidambaram.

The government is offering a total of 33.6 million shares of EIL, of which up to 5 per cent is reserved for employees.

The government holds 80.4 per cent of the EIL stock after it divested 10 per cent of its stake through an FPO in 2010.

The government had, in January last year, proposed to go in for further disinvestment in EIL, but it held off due to adverse market conditions.

The department of disinvestment has already held overseas roadshows on the EIL stake sale in order to attract foreign investors.

ICICI Securities, IDFC, Kotak Mahindra Capital, Edelweiss Financial Services and IDBI Capital are managing the disinvestment.

Set up as a provider of design, engineering and project management and consultancy services for the hydrocarbon sector, Engineers India Limited (EIL) has diversified into various other sectors to provide engineering and related technical services.

EIL has one of the largest multi-disciplinary engineering work forces with over 4.5 million engineering man-hours available in its design offices along with 1.9 million man hours of construction management services annually.

The stake sale is part of the government's programme to mop up Rs40,000 crore by way of divestment in the current financial year.

So far, it has raised about Rs3,000 crore through PSU stake sales.

Shares of EIL were trading at Rs150.15, up 3.87 per cent on the BSE.