EIL stake sale to be managed by ICICI Sec, IDFC and Kotak Capital
1 min read 22 May 2013, 02:12 PM ISTDisinvestment dept to conduct roadshows in Hong Kong, US and UK beginning June for EIL stake sale: sources
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New Delhi: Government has selected three investment bankers, ICICI Securities Ltd, IDFC Ltd and Kotak Mahindra Capital Co. Ltd, for managing 10% stake sale of Engineers India Ltd (EIL).
“The IMG (inter-ministerial group) has selected three merchant bankers for the issue and the roadshows will start next month," official sources told PTI.
Five bankers—ICICI Securities, IDFC and Kotak Mahindra Capital, Edelweiss Financial Services Ltd and IDBI Capital Market Services Ltd—had made presentations before IMG earlier this week.
The department of disinvestment would be conducting roadshows in Hong Kong, US and UK beginning June for EIL stake sale, sources said.
The government plans to disinvest 10% stake, or 33.6 million shares of EIL through follow-on public offering (FPO) in the domestic market. Up to 5% of the public offering will be reserved for the employees of the company.
At the market price of around ₹ 175 a share, the 10% stake sale could fetch about ₹ 600 crore to the exchequer.
Sources said the issue would take at least another three months time to hit the market, since the merchant bankers would now conduct due diligence, following which the draft prospectus would have to be filed with market regulator Securities and Exchnage Board of India for approval.
Government holds 80.4% in ‘Miniratna’ public sector unit EIL. In 2010, it had divested 10% of its stake in EIL through an FPO.
In January, government had decided to go for further disinvestment in consultancy major EIL through public offer.
The paid-up equity capital of the company as on 31 March 2012 was ₹ 168.47 crore. EIL is a leading provider of design, engineering and project management and consultancy services firm for the hydrocarbon sector. The government plans to raise ₹ 40,000 crore by way of disinvestment in the current fiscal. The government has already lined up a host of companies, including Coal India Ltd, Indian Oil Corp. Ltd and Hindustan Aeronautics Ltd, for stake sale.
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