EIL announces Rs 587 cr share buyback

State-owned Engineers India Ltd (EIL) will buy back nearly 7 crore shares for about Rs 587 crore as the government taps cash-rich PSUs to meet its revenue targets.
In a filing to the stock exchanges, EIL said it will buy back 11.06 per cent of the fully paid-up equity shares at a price of Rs 84 apiece.

The price is nearly 19 per cent premium to Thursday's closing price of Rs 70.70 for EIL shares on the BSE.


The government of India holds a 51.50 per cent stake in the firm that provides engineering consultancy for projects.

The board of directors "approved the proposal to buyback of not exceeding 6,98,69,047 (6.98 crore) equity shares of face value of Rs 5 each of the company (representing 11.06 per cent of the total number of fully paid-up equity shares in the paid-up share capital of the company) at a price of Rs 84 per equity for an aggregate consideration not exceeding Rs 586.90 crore," it said.

The government has asked at least eight state-run companies to consider share buybacks as it scours for ways of raising funds to rein in its fiscal deficit.

The firms asked include miner Coal India, power utility NTPC, and minerals producer NMDC.

The government wants PSUs to either meet their targets for capital expenditure or "reward the shareholder in the form of a dividend" or share buyback.