New Delhi: The Department of Disinvestment (DoD) will soon appoint merchant bankers to manage 10 percent stake sale in Engineers India Ltd (EIL) which may fetch Rs 520 crore to the exchequer.
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 percent stake, or 3.36 crore shares of EIL through Further Public Offering (FPO) in the domestic market.
At the current market price of Rs 156 apiece, the 10 percent stake sale could fetch over Rs 520 crore to the exchequer.
Up to 5 percent of the public offering will be reserved for the employees of the company.
Government currently holds 80.40 percent in EIL, a Miniratna PSU In 2010, it had divested 10 percent 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 Rs 168.47 crore.
EIL scrip were trading at Rs 156.25 on the BSE, up 2.36 percent from its previous close.
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.
The government proposes to raise Rs 40,000 crore by way of disinvestment in the current fiscal. The government has already lined up a host of companies, including Coal India, Indian Oil and Hindustan Aeronautics, for stake sale in the current fiscal.
First Published: Monday, April 15, 2013, 19:13