Engineers India Limited FPO Review (Apply)

Review By Dilip Davda on Feb 4, 2014

 

Even when market has seen 21K plus for Sensex for last few months with volatile trades in secondary market, we marked end of CY 2013 with FPO of Power Grid Corporation that generated Rs. 6959 crore and now the beginning of CY 2014 is marked by another FPO of Engineers India Ltd. SME IPOs kept making bee lines during past few months with no main line IPO from any private sector company. This is simply due to prevalence of No Confidence in the reforms of the economy by investor masses.

 

 As known the company is an engineering consultancy company providing design, engineering, procurement, construction and integrated project management services, principally focused on the oil and gas, petrochemicals, fertilizer and LNG industry segments in India and internationally. It also operate in other sectors including non-ferrous mining and metallurgy, power and infrastructure and is also a primary provider of engineering consultancy services for the GoI’s energy security initiative under its Integrated Energy Policy for strategic crude storages. Its services in these industries and sectors cover the entire spectrum of activities from concept to commissioning of a project that include preparation of project feasibility reports, technology selection, project management, process design, basic and detailed engineering, procurement, inspection, project audit, supply chain management, cost engineering, planning and scheduling, facilitation of statutory and regulatory approvals for Indian projects, construction management and commissioning. The company also provides specialist services such as heat and mass transfer equipment design, environmental engineering services, specialist materials and maintenance services, energy conservation services, plant operation and safety services. EIL also execute projects on a turnkey basis.

 

 Engineers India Ltd. (EIL) is coming out with FPO that opens for subscription on 06.02.2014 and will close on 10.02.2014. The company is issuing 33693660 equity share of Rs. 5 each within a price band of Rs. 145-150 to mobilize around Rs. 488.5-505.4 crore based on upper and lower price bands.  The offer includes 500000 shares reserved for employees of the company. The issue also offers discount of Rs. 6 per share to retail investors and employees. The issue is lead managed by ICICI Securities Ltd., IDFC Capital Ltd. and Kotak Mahindra Capital Co. Ltd. and Karvy Computershare Pvt. Ltd. is the registrar to the offer. This being dilution of GoI stake, no addition to equity is taking place.

 

 For last three fiscals, it has posted an average EPS of Rs. 17.33. For nine months ended 31.12.13 it has earned net profit of Rs. 3762.11 crore on a turnover of Rs. 13287.63 crore with an EPS of Rs. 11.17. Its first FPO came in July 2010 when it raised Rs. 977 crore by way of GoI’s stake dilution at a price of RS. 290 per share and was oversubscribed by 13.36 times then.

 

 EIL closed at Rs 150.30 on BSE, (+ Rs 5.75), or (+3.98 %) on 04.02.14 and has 52-week high of the Rs 223.00 and low of Rs 121.15. Based on the latest BV of the company of Rs 66.41 per share it traded at P/BV of 2.26.


Conclusion / Investment Strategy

Apply for long term.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Feb 4, 2014

Review Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at its own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda, a freelance journalist

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com

EIL FPO FAQs

  1. 1. Why EIL FPO?

    The initial public offer (IPO) of Engineers India Limited offers an early investment opportunity in Engineers India Limited. A stock market investor can buy EIL FPO shares by applying in IPO before Engineers India Limited shares get listed at the stock exchanges. An investor could invest in EIL FPO for short term listing gain or a long term.

  2. 2. How is EIL FPO?

    Read the EIL FPO recommendations by the leading analyst and leading stock brokers.

  3. 3. EIL FPO what should investors do?

    EIL FPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the EIL FPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.

  4. 4. Is EIL FPO good?

    Our recommendation for EIL FPO is to subscribe.

  5. 5. Is EIL FPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the EIL FPO.

  6. 6. When will EIL FPO allotment status?

    The EIL FPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit EIL FPO allotment status to check.

  7. 7. When will EIL FPO list?

    The EIL FPO will list on Friday, February 28, 2014, at BSE, NSE.








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