Engineers India FPO : FPO Price Band Fixed

by khalid on 26/07/2010 · 0 comments

Public sector undertaking Engineers India (EIL) was established in 1965 to provide design and engineering services for petroleum, power and fertiliser companies. The Government has fixed the price band of its follow-on public offer (FPO) at Rs 270 – 290 a share. A group of ministers headed by Finance Minister Pranab Mukherjee had yesterday fixed the FPO price band, which is a steep 14.75 to 8.44 per cent discount to Friday’s closing price. The government will sell 10 per cent stake through the FPO which comprises a net offer of 3.29 crore equity shares of Rs 5 each. At present, the government holds a little over 90 per cent in the company.

The money raised by this proposed FPO would be around Rs 1100 – 1200 crore. It will be the second divestment this fiscal after Satluj Jal Vidyut Nigam through which the Government raised Rs 1,000- crore. The Government has set a target to collect Rs 40,000 crore through disinvestment during the current year.

The company had an order book of Rs 6,236 crore as on 31st March 2010 and operates majorly in the hydrocarbon sector, offering end-to-end solutions in engineering and design. Apart from the domestic operations, EIL has also presence in the Middle East and Africa and is betting big on Latin America, with specific focus on Venezuela, where the oil exploration activity is witnessing a surge. The company, which posted a net profit of Rs 114.56 crore in the April-June quarter, has witnessed an annual growth of 47 per cent in revenues and profit after tax in the last three years.

Book Running Lead Managers (BRLMs) to the offer are ICICI Securities as well as HSBC Securities and Capital Markets (India), IDFC Capital and SBI Capital Markets.

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