Engineers India is launching its FPO or follow on public offer for 3,36,93,660 shares in a price band of Rs 145-150. This is a stake sale by the government of India of 10%. There is a fixed price discount of Rs 6 for retail and employees. This discount works out to 4.13% at the lower end of the band and at 4% at the upper end of the band.

The last FPO from Engineers India was in July 2010 and the price band at that time was Rs270-290.The issue was oversubscribed 11.63 times. There was a discount to the market price which helped in the over subscription unlike this time. The price band is actually higher than the market if one considers the price prevailing in the markets on Monday. The share had closed on Monday at Rs144.55 on the BSE and at Rs 145 on the NSE. Yesterday that is Tuesday the 4th February the share rose sharply and closed at Rs 150.30 up Rs 5.75 or 3.98%. On NSE the share closed at Rs 150.70 up Rs 5.70 or 3.93%. Volumes were significantly higher than other days with BSE witnessing a jump from 13,444 shares to 1,56,2 times jump from 91 shares. NSE saw an almost 3.6 times jump in volume from 1,20,778 to 4,32,251 shares.

The company has its roadshow in Mumbai today. The FPO opens on Thursday the 6th February and closes on Monday the 10th February. The price band at Rs 145-150 is at a discount of Rs 0.30 or 0.19% at the top end of the band and at the lower end the discount is 3.44%. The pricing considering the prevailing price and rise on Tuesday leaves nothing on the table for investors looking at an arbitrage.

More on this issue post the roadshow in the next couple of days.