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| Edited By: |Source: PTI |Updated: Mar 17, 2018, 04:48 AM IST
The government today set Rs270-290 as the price band for the follow-on public offering of state-run Engineer India Ltd.
A group of ministers headed by finance minister Pranab Mukherjee set the price band at a discount to Friday's closing of Rs337.65 for the sale of government's 10% shareholding in the engineering consultancy firm.
The government will raise about Rs9,000 crore at the lower end of the price band and over Rs9,700 crore at the upper end, official sources said.
EIL's public offer of 33.69 million equity shares will open on July 27 and close on July 29 for qualified institutional buyers and on July 30 for the rest (retail and HNIs).
The government holds 90.4% stake in EIL, which provides design and engineering services for petroleum, power and fertiliser companies.
Post FPO, government holding in EIL will fall to 80.4%.
Sources said 712,000 equity shares have been reserved for company employees who would be entitled to the discount that retail investors will get in the offer that is being done through book building route.
Half of the net offer of 32.98 million shares (after deducting employees quota) have been reserved for Qualified Institutional Buyers and retail investors would get up to 35% of 11.54 million shares. The rest has been earmarked for non-institutional buyers.
HSBC Holdings Plc, ICICI Securities, SBI Capital Markets and IDFC Capital are book running lead managers for the FPO.
EIL had reported a 25.43% rise in consolidated net profit to Rs440.47 crore for the 2009-10 fiscal.
As a prelude to divestment, EIL paid a 1,000% (Rs100 per share) special dividend totalling Rs561.65 crore. Of this, the government got Rs507.65 crore, in addition to a dividend tax of over Rs96 crore. EIL had a cash reserve of Rs1,320 crore as on March 31.
