Government raises Rs 500 cr selling EIL shares at Rs 150 each

The government today fixed the issue price for the sale of a stake in Engineers India Ltd (EIL) at Rs 150 a share, the upper end of the price band, garnering Rs 500 crore for the exchequer.
The Empowered Group of Ministers (EGoM) set the selling price at Rs 150 a share, with a discount of Rs 6 for retail investors, sources said. The issue was fully subscribed, they said.
EIL shares gained 0.29 per cent to Rs 154 at the close on the BSE today, valuing the company at Rs 5,188 crore.
The government, which has an 80.4 per cent stake in the miniratna company, had offered 3.36 crore shares, or a 10 per cent stake, through a follow-on public offer (FPO) in a price band of Rs 145-150 a share.

The FPO attracted bids for over 9.52 crore shares, or 2.83 times the shares offered, at the close yesterday.
After divesting a 10 per cent stake in EIL in 2010, the government decided in January last year to go in for a further share sale in EIL, a leading provider of design, engineering and project management and consultancy services for the hydrocarbon sector.

A discount of Rs 6 per share was offered to retail investors and employees participating in the offer. Five per cent of the offer was reserved for EIL employees.
The stake sale was managed by ICICI Securities, IDFC and Kotak Mahindra Capital, Edelweiss Financial Services and IDBI Capital.

This is the second follow-on offer from the government in the current financial year. In December, the government sold 4 per cent in Power Grid Corporation of India, which fetched the exchequer over Rs 1,600 crore.
The government had until now raised about Rs 3,000 crore of its disinvestment target of Rs 40,000 crore for the current financial year.