EIL files draft prospectus with Sebi to sell 10% stake via FPO
New Delhi: State-run Engineers India Ltd (EIL) Friday filed a draft prospectus with market regulator Sebi to divest 10 percent stake through Follow-on Public Offer (FPO), which may fetch Rs 470 crore to the exchequer.
The company will hit the market in the first half of September, according to sources.
The company, they added however, is short of four independent directors in meeting Sebi's listing norms.
EIL will sell 3.36 crore shares, amounting to 10 percent stake of the company, through FPO in the domestic market, said the Draft Red Herring Prospectus (DRHP) filed with Sebi.
At the current market price of Rs 139, stake sale could fetch about Rs 470 crore to the exchequer. The government holds 80.40 percent in the Miniratna PSU.
"The offer comprises a net offer to public of 33,193,660 equity shares and a reservation of 5 lakh equity shares for subscription by eligible employees," the prospectus noted.
The offer shall constitute 10 percent of the post offer paid-up equity share capital of the company and the net offer shall constitute 9.85 percent of the post offer paid-up equity share capital of the company," it added.
ICICI Securities, IDFC Capital and Kotak Mahindra Capital Company are book running lead managers to the issue.
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, NMDC and Hindustan Copper in the last financial year.
EIL stake sale could not be done through the OFS mechanism as the company is already compliant with the Sebi's public holding norms. Besides, it is not in top 100 companies in terms of market capitalisation.
EIL is a leading provider of design, engineering and project management and consultancy services firm for the hydrocarbon sector. In 2010, the government had divested 10 percent stake through an FPO in the company.