EIL share sale subscribed 2.54 times, government nets Rs 637 crore

NEW DELHI: The government today raised Rs 637 crore through 10 per cent stake sale in Engineers India ( EIL) with its offer for sale getting subscribed by an impressive 2.54 times.

The offer for sale of over 3.36 crore shares drew enthusiastic response from both institutional and retail investors, generating demand for over 8.56 crore shares.

At the floor price of Rs 189 apiece, the sale of over 3.36 crore shares would fetch around Rs 637 crore to the Exchequer, considering 5 per cent discount being offered to retail shareholders.

According to the stock exchange data, EIL share sale received bids for over 8.56 crore shares, representing 2.54 times the total shares on offer.

Institutional investors bid for over 5.91 crore shares, against 2.69 crore shares on offer. The portion was subscribed 2.20 times.

Retail investors bid for 3.92 times the shares reserved for them. Bids came in for over 2.64 crore shares as against 67.38 lakh shares on offer.

Disinvestment Secretary Neeraj Gupta said government is a prudent investor and will look for right opportunity to go ahead with its disinvestment plan.

This was the fifth disinvestment in this fiscal. The government in August last sold a minority stake in IOC.

The EIL stock witnessed volatile trade today and the scrip ended 0.52 per cent lower at Rs 193.05 on BSE.

The government currently holds 69.37 per cent in EIL, a public sector company under the Ministry of Petroleum and Natural Gas. It provides engineering and construction consultancy, particularly in the hydrocarbon space.

With EIL disinvestment, the government's PSU stake sale kitty so far this fiscal has swelled to Rs 13,337 crore. PSUs which have been divested this year include IOC, PFC, REC and Dredging Corp.

For full fiscal, the government had budgeted to raise Rs 69,500 crore. Of the target, Rs 41,000 crore was to come from minority stake sale in PSUs and another Rs 28,500 crore from strategic stake sale.