EIL share sale oversubscribed 2.54 times, govt nets Rs 640 crore

New Delhi: Government on Friday raised Rs 640 crore through 10 percent stake sale in Engineers India Ltd (EIL) with its offer for sale getting oversubscribed by an impressive 2.54 times.

The Finance Ministry in a statement said the first stake sale in the January-March quarter got off to a "thumping start today" with total subscription of Rs 1,641.52 crore. The issue stood oversubscribed by 2.54 times.

The offer for sale of over 3.36 crore shares drew response from both institutional and retail investors, generating demand for over 8.56 crore shares.

"The investor enthusiasm for the issue is borne out by the fact that the indicative price for was Rs 190.63 which is above the floor price (Rs 189)," the statement said.

Calculated on the basis of the indicative price, the sale of over 3.36 crore shares would fetch around Rs 640 crore to the exchequer.

With EIL disinvestment, the government's PSU stake sale kitty so far this fiscal has swelled to Rs 13,340 crore. PSUs which have been divested this year include IOC, PFC, REC and Dredging Corp.

According to the stock exchange data, EIL share sale received bids for over 8.56 crore shares, representing 2.54 times the total shares on offer.

Institutional investors bid for over 5.91 crore shares, against 2.69 crore shares on offer. The portion was subscribed 2.20 times.

Retail investors bid for 3.92 times the shares reserved for them. Bids came in for over 2.64 crore shares as against 67.38 lakh shares on offer.

Disinvestment Secretary Neeraj Gupta said the government is a prudent investor and will look for right opportunity to go ahead with its disinvestment plan.

This was the fifth disinvestment of the fiscal. The government in August last sold a minority stake in IOC.

The EIL stock witnessed volatile trade today and the scrip ended 0.52 percent lower at Rs 193.05 on BSE.

The government's holding in EIL would come down to 59.37 percent with this disinvestment. EIL provides engineering and construction consultancy, particularly in the hydrocarbon space.

For the full fiscal, the government had budgeted to raise Rs 69,500 crore. Of the target, Rs 41,000 crore was to come from minority stake sale in PSUs and another Rs 28,500 crore from strategic stake sale.