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Mumbai, July 26 (PTI) The state-run Engineers India (EIL) today said it has set the price band for the over Rs 900-crore follow-on public offering (FPO), which hits the market tomorrow, at Rs 270-290 a share. A group of ministers headed by Finance Minister Pranab Mukherjee had yesterday fixed the FPO price band at Rs 270-290, which is a steep 14.75 to 8.44 per cent discount to Friday''s closing price. Following this sharply lower pricing, the EIL counter was battered by investors today, which saw the scrip plunging nearly 13 per cent in the day. However, the shares managed to recoup some of the sharp losses, yet closed at Rs 316.75, or over 6 per cent loss on the BSE today. The offer will close on July 29 for institutional buyers and July 30 for retail investors. Retail investors will be given a discount of 5 per cent on the offer price, the company said. he government will mop up about Rs 909 crore at the lower end of the FPO and Rs 977 core on the higher end. The government will sell 10 per cent stake through the FPO which comprises a net offer of 3.29 crore equity shares of Rs 5 each. At present, the government holds a little over 90 per cent in the company. It will be the second divestment this fiscal after Satluj Jal Vidyut Nigam through which the government raised Rs 1,000- crore. The government has set a target to collect Rs 40,000 crore through disinvestment during the current year. "We took the existing market price, a fundamental analysis of the company and feedback we received during roadshows while fixing the price," lead managers ICICI Securities Managing Director Madhabi Puri Buch said. Disinvestment Secretary Sumeet Bose said the government is always committed to fair valuation and the pricing is an effort towards the same. The company, a leader in engineering consultancy, had an order book of Rs 6,236 crore as on March 31, 2010 and operates majorly in the hydrocarbon sector, offering end-to-end solutions in engineering and design. "We work from concept to commissioning and are already diversifying into infrastructure, power, waste water management and city gas pipelines," EIL Chairman and Managing Director A K Purwaha said. Apart from the domestic operations, EIL has also presence in the Middle East and Africa and is betting big on Latin America, with specific focus on Venezuela, where the oil exploration activity is witnessing a surge, Purwaha added. The company, which posted a net profit of Rs 114.56 crore in the April-June quarter, has witnessed an annual growth of 47 per cent in revenues and profit after tax in the last three years, he said.
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