Govt extends EIL share sale by two days due to bank strike

The government has extended the window for 10% stake sale in Engineers India Ltd

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(EIL) by two days to February 12, in the wake of strike by public sector bank employees.

Initially, the issue was to close today.

"The issue has been extended by two days so that bank strike does not impact retail investment. Retail investors usually invest through banks and this extension would provide them more window to invest in EIL," a senior official said.

Demanding higher wages, employees of PSU banks have gone on a two-day strike beginning today.

Government is selling over 3.36 crore shares or 10% of its stake in EIL through a Follow on public offer (FPO) and the price band is Rs 145-150 apiece.

The issue, which opened on February 6, got bids for over 4.53 crore shares accounting for 1.35 times the shares on offer.

At the upper end of price band, the share sale would fetch Rs 500 crore to the exchequer.

As much as 35% of the issue size is reserved for retail investors and so far they have put in bids for 70% of the shares reserved for them, the official said.

The qualified institutional investors portion was subscribed more than 2.26 times.

The government, which currently holds 80.4% in the miniratna company, had divested a 10% stake in 2010.

In January last year, the government decided to go in for further disinvestment in EIL, a leading provider of design, engineering and project management and consultancy services for the hydrocarbon sector.

A discount of Rs 6 per share would be offered to retail investors and employees participating in the offer. Five% of the offer has been reserved for EIL employees.

The stake sale is being managed by ICICI Securities, IDFC and Kotak Mahindra Capital, Edelweiss Financial Services and IDBI Capital.

This is the second disinvestment through a follow-on offer in the current financial year. In December, government sold 4% in Power Grid Corporation of India, which fetched the exchequer over Rs 1,600 crore.

The government has raised about Rs 3,000 crore of its disinvestment target of Rs 40,000 crore for the current financial year.

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