New Delhi: A ministerial panel on disinvestment will meet on Tuesday to decide on the price band and date for the government's sale of a 10 per cent stake in Engineers India through a follow-on public offer (FPO).
"The EGoM on EIL disinvestment will meet tomorrow to fix the price band and timing of the FPO," an official source said. The panel headed by Finance Minister P Chidambaram had approved the stake sale last week. The offering may fetch the exchequer about Rs 500 crore. The Department of Disinvestment has already held overseas roadshows to attract foreign investors to the EIL stake sale.
EIL shares closed at Rs 144.55, down 0.86 per cent, on the BSE, valuing the company at Rs 4,870 crore. The government plans to sell 3.36 crore EIL shares, with up to 5 per cent of the offer reserved for employees. ICICI Securities, IDFC and Kotak Mahindra Capital, Edelweiss Financial Services and IDBI Capital are managing the disinvestment.
The government holds 80.4 per cent in the 'miniratna' public sector undertaking. In 2010, it had divested 10 per cent of its stake in EIL through an FPO. In January last year, the government decided to go in for further disinvestment in EIL, which is a leading provider of design, engineering and project management and consultancy services for the hydrocarbon sector. The government plans to raise Rs 40,000 crore by way of disinvestment in the current financial year. So far, it has raised about Rs 3,000 crore through PSU stake sales.