Subscribe to Engineers India FPO:Nirmal Bang

MUMBAI – Nirmal Bang has advised investors to ‘Subscribe’ to the follow-on public offer of Engineers India. The state-owned company has entered the capital market to 3.36 crore shares in the price-band of Rs 270-290 per share.

The object of the issue is to dilute the Government of India’s holding as a part of disinvestment plan, proceeds will go to Government of India.

“EIL has posted revenue and net profit CAGR of 63% and 49% respectively in the last three years. EIL has order book position of Rs 6236 crore executable over 2.5-3 years, thus gives earning visibility of 2-3 years. Apart from this, the capex planned by oil PSU are quite encouraging.

EIL is offered at a PE of 21.99 & 20.47 times at upper & lower band respectively which is fairly prices. We recommended ‘Subscribe’ to EIL on basis of (1) EIL has a proven track record of project implementation, (2) strong financials, zero debt on balance sheet (3) robust order book, (4) diversifying into the new growth areas,” the report said.