Govt to divest 10% stake in EIL; aims to raise Rs 800 cr
The government decided to offload its 10 stake in consultancy major Engineers India Ltd (EIL) through public offer, which may fetch it around Rs 800 crore this fiscal.
January 10, 2013 / 19:04 IST
The government decided to offload its 10 stake in consultancy major Engineers India Ltd (EIL) through public offer, which may fetch it around Rs 800 crore this fiscal. "We expect to get around Rs 800 crore at current prices," Finance Minister P Chidambaram told reporters after the meeting of the Cabinet Committee on Economic Affairs (CCEA), which approved the disinvestment in EIL.
The disinvestment will take place through Further Public Offering (FPO), he said. Chidambaram expressed the hope that disinvestment of the leading engineering consultancy firm would happen this fiscal. After the disinvestment, the government's shareholding in the company would come down to 70.40 per cent. The paid up equity capital of the company, as on March 31, 2012 was Rs 168.47 crore.The government holds 80.40 per cent stake in EIL, a 'Mini-Ratna' firm. In 2010, it had divested 10 per cent stake through an FPO in EIL. To a query, Chidambaram said, "The OFS (Offer For Sale) mechanism is not available in this case", as the company is already compliant with market regulator Sebi's public holding norms. Besides, it is not in top 100 companies in terms of market capitalisation.The government used the OFS route, popularly known as auction method, to divest its stake in NMDC and Hindustan Copper this fiscal. Sebi introduced OFS to help companies achieve minimum public holding norms. EIL scrip closed at Rs 228.90 on the BSE, down 4.11 per cent from its previous close. For the July-September quarter of the current fiscal, EIL reported net profit of Rs 161.24 crore, up 10 per cent over the same period in 2011-12.The government has proposed to raise Rs 30,000 crore by way of disinvestment in 2012-13 and so far it has been able to realise just over Rs 6,900 crore. Disinvestment of Oil India and NTPC is lined up for January and February. EIL is leading provider of design, engineering and project management and consultancy services firm for the hydrocarbon sector.Also Read:Jharia rehab: Govt okays hike in dwelling unit areaGovt to infuse Rs 12,200 cr in banks; will sell 10% in EIL Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
