Engineers India (EIL) advanced on the bourses on hopes that the government is in the process of selling 51 per cent of its equity in the company to a strategic investor.
On the Bombay Stock Exchange, the scrip closed at Rs 344.05, up 7.58 per cent over Tuesday's close, and 2.21 lakh shares changed hands. On the National Stock Exchange, the counter clocked a volume of 6.01 lakh shares and settled at Rs 344.10.
A dealer at a local brokerage house said, "Low floating stock and higher bid price is said to have driven the stock up following frenzied buying by investors, traders and local funds."
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The bidding and the subsequent open offer is expected to be in the range of Rs 450-500 per share. "Due to the low floating stock available currently, all the shares tendered by the public in the open offer will be accepted," dealers said.
Meanwhile, an analyst at a leading foreign brokerage house added, "The due diligence for EIL is said to have already been completed by the bidders and some state-owned firms such as ONGC, BHEL and private companies such as Reliance Industries, Larsen & Toubro, Essar and Tatas are said to be in the race."
It is expected that EIL's privatisation may initiate a fresh wave of investor interest in public sector units, dealers added.
The competition for EIL is expected to be intense as a variety of investors have shown interest in the company which is known for its expertise in consultancy in strategic engineering.
ICICI Venture is said to be in the race in consortium with Sun F&C. Citigroup, New Bridge Capital and CDC are also part of another consortium bidding for EIL.