Issue Subscribed over 13 times – Retail subscription 2.99 times

Engineers India Limited which had launched its FPO was well received. The issue opened on Tuesday the 27th of July and closed on Thursday the 29th of July for QIB’s and for the other investors on Friday the 30th of July. The issue was subscribed 13.36 times. This type of subscription is indicative of the well received price in the minds of investors of all categories.

I believe a discount to market price which leaves money on the table for investors is better and if it helps in reviving the interest of investors, particularly the retail sector it should certainly be done. In case of EIL the price band was announced as Rs 270-290 when the previous day’s closing price was Rs 337.65 implying a discount of almost 14% at the top end of the price band. The proper pricing has ensured that the interest is huge and because there is such interest one will not see a selling spree when these shares are listed. I would like to congratulate the efforts of the Divestment Ministry in bringing about a price band which has revived the interest in FPO’s from Institutional and retail investors.

Let’s hope the proper pricing experience in EIL will be used going forward where the twin objective of ensuring mass participation and making investors earn something is achieved. A healthy capital market particularly the primary market is of utmost importance if the objective of 25% public holding is to be achieved.

The details of the subscription are as follows: –