Even as its divestment process has remained a non-starter in the current fiscal, the government is still pushing for selling stake in public sector undertakings.
In its latest endeavour, the Finance Ministry has proposed to sell 10% stake in Engineers India Limited (EIL) through a follow-on public offer (FPO).
“The Finance Ministry has sent a proposal to the Cabinet Committee on Economic Affairs. It is likely to be taken up in the next meeting of CCEA,” a source familiar with the development told Express. The ministry has also suggested a 5% discount for retail investors.
EIL, which provides engineering and related technical services for petroleum refineries and other industrial projects, is under the administrative control of Ministry of Petroleum and Natural Gas. It has so far executed 400 major projects across petroleum refineries, oil and gas processing, infrastructure, ports and terminals, mining and metallurgical and offshore platforms.
According to sources, the government is hoping to rake in about Rs 800 crore from the FPO. The last time the government divested stake in EIL was in July 2010 when it sold 10 per cent stake through the FPO route. The issue had received a good response from the investors and was subscribed 13.35 times. The government holds 80.4% stake in EIL.
Targeting to raise Rs 10,000 crores through stake sale in PSUs, the government has not been able to raise a single rupee in the first six months of the current fiscal. It had missed the divestment targets in 2011-12 and 2010-11 financial years also.