The follow-on public offering from th government-run Engineers India (EIL) got a tepid response on the first day of the issue today with offer getting a paltry 1 per cent subscription.
The FPO, through which the government expects to raise up to Rs 977 crore, received bids of 4.2 lakh shares against 3.36 crore equities on offer, thus getting subscribed 1 per cent, as per the data available with the NSE.
Most of the bids came in from retail investors with 4 per cent of the overall portion reserved for them getting subscribed.
The state-run firm has came out with its further public offer of 3.36 crore equity shares of Rs 5 each in the price band of Rs 270-290 apiece.
The offer closes on July 29 for institutional buyers and on July 30 for others. Retail bidders will be given a discount of 5 per cent on the issue price.
Meanwhile, speaking to reporters in Bangalore, EIL Director for projects RK Grover said the company is looking at getting into city gas distribution. It would look at servicing, operations and stake holding, he said.
The government is selling 10 per cent stake through the FPO. At present, the government holds a little over 90 percent in the company.
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 hydrocarbon sector, offering end-to-end solutions in engineering and design.
Meanwhile, in the secondary market, shares of EIL closed in red, despite a firm broader market. EIL ended at Rs 311.90, down by 1.53 per cent on the BSE, which rose 57 points to settle at 18,077.61.
ICICI Securities, IDFC Capital, SBI Capital Markets and HSBC Securities and Capital Markets India are the book running lead managers to the issue.
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