The government today approved selling its 10 per cent stake in Engineers India (EIL) through follow-on public offer (FPO) route and issuing two bonus shares for every share of the company before the launch of the public offer.
EIL, an engineering consultant mostly to oil and gas companies like Indian Oil Corporation and Oil and Natural Gas Corporation, is the 7th PSU to go public in the second term of the UPA government. It is one of the 60 profitable state-run firms identified by the Department of Disinvestment for selling government stake.
The Cabinet Committee on Economic Affairs (CCEA) approved splitting every EIL share of Rs 10 into two shares of Rs 5 each and paying a special dividend of 1000 per cent (Rs 100 per share), an official spokesperson said.
Sources in the know, however, said the FPO was unlikely this fiscal as it would take about 180 days from the date of approval for completing the process.
The government holds 90.40 per cent in EIL, which posted a profit of Rs 345 crore on a turnover of Rs 1,532 crore in 2008-09 fiscal.
Earlier in the day, shares of EIL shares on the Bombay Stock Exchange rose to an all-time high of Rs 1,784 on anticipation of divestment in the company.
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EIL closed the day at Rs 1733.10, 4 per cent higher than its last close after paring some of the gains
After the disinvestment, the Government shareholding in the company would come down to 80.40 per cent, an official statement issued said.
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