Engineers India soars as Govt plans 10% stake sale ,2:1 Bonus & Stock Split

15th-Jan-10 (Friday)
Engineers India was locked at upper circuit limit of 20% at Rs 2079.70 at 9:13 IST after the government on Thursday, 14 January 2010, approved sale of a 10% stake in the state-run company.
The stock hit a high of Rs 2079.70, which is an all-time high. It hit a low of Rs 1945 so far during the day. The stock had hit 52-week low of Rs 405 on 19 January 2009.
The mid-cap state-run engineering consultancy active in the oil sector has an equity capital of Rs 56.16 crore. Face value per share is Rs 10.
The current price of Rs 2079.70 discounts the company's Q2 September 2009, annualised EPS of Rs 75.05, by a PE multiple of 27.71.
Engineers India, which is 90.40% owned by the government, is the latest in a list of planned sell-offs aimed at raising funds to cut India's fiscal deficit. After the public offer, the government's stake in the company will come down to 80.4% from the current 90.4%.
The government gave no details of the timeframe for the public offering or how much it wanted to raise. However, reports suggest that the issue is likely to hit the market in April or May this year.
Before the public offering, the company will issue two bonus shares for every share held, split each share of Rs 10 into two shares of Rs 5 each and declare a special dividend of Rs 100 per share
India aims to sell stakes in about 60 firms in the coming years. The government's fiscal deficit is estimated to be at a 16-year high of 6.8% of gross domestic product by the end of March 2010.
Engineers India's net profit rose 59.2% to Rs 105.37 crore on a 36.10% rise in sales to Rs 468.20 crore in Q2 September 2009 over Q2 September 2008.
Engineers India provides engineering and related technical services for petroleum refineries and other industrial projects.