In a second disinvestment this fiscal, state-run consultancy firm Engineers India is likely to come out with a follow-on public offer in mid-July to raise around Rs 1,200 crore.
"The FPO in all probability will hit the market in mid-July," a senior government official told PTI.
To carry forward the disinvestment process, the government has shortlisted HSBC Holdings Plc, ICICI Securities, SBI Capital Markets and IDFC Capital to manage the public offering.
"The four firms have been shortlisted from 11 merchant bankers," a senior government official said. "They will be appointed once the Finance Minister approves it."
At the current market price, the government is expected to raise about Rs 1,100-1,200 crore through sale of 10 per cent stake in EIL, which provides design and engineering services for petroleum, power and fertiliser companies.
Currently, the government holds 90.40 per cent stake in the company.
The government will select a legal counsel to manage the FPO by next week. Merchant bankers and legal counsel will then together file draft red herring prospectus (DRHP) for the FPO.
"We estimate the DRHP can be filed in three weeks from the date of appointment of legal counsel and it may take an equal time to get approval of (market regulator) SEBI," he said.
Besides HSBC, ICICI, SBI and IDFC, UBS AG, Kotak Mahindra Capital, Enam Securities and IDBI Capital Market Services, Avendus Capital, Edelweiss Capital and Centrum Broking were in fray for being appointed financial managers of the issue.
As a prelude to disinvestment, EIL paid a 1,000 per cent (Rs 100 per share) special dividend totalling Rs 561.65 crore. Of this, the government, which holds 90.4 per cent equity, got Rs 507.65 crore plus a dividend tax of over Rs 96 crore.
He said the company will now issue two bonus shares for every one held and subsequently split the Rs 10 share into two of Rs 5 each. The process would be completed by the May-end.
Thereafter, the company will finalise audited accounts for 2009-10 fiscal before filing draft red herring prospectus for the follow-on public offering.
EIL had reported a 67 per cent jump in net profit to Rs 310.65 crore in April-December period of the 2009-10 fiscal. Turnover had risen 20 per cent to Rs 1,353.46 crore.
The first stake sale of this fiscal -- SJVNL-- has got good response from investors, prompting the government to fix the issue price at the upper end of the band at Rs 26 a share. The stake sale would fetch the Centre over Rs 1,000 crore.
