Tuesday, August 3, 2010

Engineers India FPO - Analysis, Recommendation, Subscription, Allotment, Listing

Analysis:
Engineers India (EIL), a state owned engineering consultancy company, has come out with a follow-on public offer of 3,36,93,660 equity shares of Rs 5 each on July 27, 2010. The offer comprises a net offer to the public of 3,29,81,660 equity shares and a reservation of 7,12,000 equity shares for subscription by eligible employees

EIL is an engineering consultancy company providing design, engineering, procurement, construction and integrated project management services, principally focused on the oil and gas and petrochemicals industries in India and internationally.

The President of India, acting through the ministry of petroleum and natural gas, government of india will be diluting its 10% stake through this offer and the company won't be getting any money through this offer. Government holding will be reduced to 80.40% post dilution.

FPO will be opened for subscription till July 29 for qualified institutional investors and till July 30 for retail and non-institutional investors. The price band has been fixed at Rs. 270- Rs. 290

For the year ended March 31, 2010, the company has reported profit after tax at Rs 444.34 crore on total income of Rs 2,196.96 crore. The company's order book, comprising anticipated revenues from the unexecuted portions of existing contracts (including signed contracts for which all pre-conditions to entry into force have been met and letters of acceptance issued by the client prior to execution of the final contract) as of March 31, 2010, was Rs 62,368.4 million.

HSBC Securities & Capital Markets (India) Ltd, ICICI Securities Ltd, IDFC Capital Ltd and SBI Capital Markets Ltd are the book running lead managers to the issue. Link Intime India Pvt Ltd is the registrar.

Recommendation:
Would recommend investors to stay away from this FPO. There could be some gains in the listing but may be not significant.

Subscription:
At the close of the IPO, EIL FPO got subscribed by 13.36 times.
QII segment got subscribed by 23.43 times
NII segment got subscribed by 5.85 times
Retail segment got subscribed by 2.99 times
Employee reservation segment got subscribed by 0.57 times

Allotment:
Government has fixed price of Rs. 290 per share for the FPO. Click here to check if you have been alloted EIL shares!

Listing:
Watch out for the listing...


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