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The government’s divestment of 10 per cent of its stake in Engineers India Ltd sailed through on Friday, with the issue being subscribed 2.54 times.
The government put over 3.36 crore shares on the block, selling them at a floor price of Rs 189. This would net the exchequer a minimum of Rs 637 crore, more if the final cut-off price is higher. The portion reserved for retail investors (67,38,732 shares) was subscribed 3.91 times, with the highest number of bids made at the floor price. (Retail investors are eligible for a five per cent discount on the final cut-off price of the issue.)
Non-retail investors subscribed 2.19 times to the over 2.69 crore shares allotted to them, with bids being spread out in the Rs 189-Rs 190 range.
After the stake sale, the government will still hold a little over 59 per cent in EIL. The company is an engineering and technical consultant for petroleum refineries and industrial projects, under the ambit of the Ministry of Petroleum and Natural Gas. SBICAP Securities, ICICI Securities, Edelweiss Securities and Deutsche Equities India Private Ltd managed the share sale.
For the government, EIL will be the fifth disinvestment this financial year, after Rural Electrification Corporation, Power Finance Corp, Dredging Corporation of India and Indian Oil Corporation, intended to bridge the fiscal deficit. However, the disinvestment programme (including EIL) at just over Rs 13,200 crore is still far short of the Rs 41,000-crore Union Budget target.
Shares of EIL closed down 0.52 per cent at Rs 193.05 on the BSE on Friday while the benchmark Sensex surged 1.64 per cent, rising steadily through the day to close at 24,870.69.
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