 "EIL")
The government has set the floor price of Rs 189 per share for divesting 10 per cent stake in Engineers India. The stake sale will be done through the offer for sale (OFS) route on Friday.
The base price is 2.6 per cent lower than the company's current market price. Shares of Engineers India fell 5.5 per cent to close at Rs 194 on the BSE. The centre is offering 5 per cent additional discount to retail investors.
The government plans to divest nearly 33.7 million shares of the company, which will fetch around Rs 636 crore. Around 20 per cent (6.7 million shares) of the issue is reserved for retail investors.
Shares of Engineers India are down 20 per cent so far in 2016. In comparison, the benchmark Sensex is down around 6 per cent during the same period.
The 12-month consensus analysts' price target for the stock is Rs 240, as per Bloomberg.
The government currently owns 69.4 per cent stake in Engineers India. The offer is being managed by SBI Cap Securities, ICICI Securities, Edelweiss Securities and Deutsche Equities.
The government has raised Rs 12,700 crore through disinvestment in public sector undertakings (PSUs) so far in the current financial year. Engineers India will be the fifth PSU where the government will divest its holding in the current fiscal. Indian Oil Corporation, PFC and Rural Electrification Corporation (REC) are among the PSUs were the government has sold stake this fiscal. Among them, the Indian Oil stake sale has mopped up the highest Rs 9,370 crore.
