EIL offer to kick-start fresh PSU divestment

Mumbai, July 26, 2010: Public sector undertaking Engineers India Limited proposes to enter the capital markets tomorrow with its follow-on public offer of 33,693,660 equity shares of Rs 5 each. The Offer comprises a net offer to the public of 32,981,660 Equity Shares and reservation of 712,000 Equity Shares for subscription by Eligible Employees. 

The Offer marks a divestment of 10% in EIL by the President of India, acting through the Ministry of Petroleum and Natural Gas, Government of India.

The Offer is being made through a 100% book building process wherein up to 50% of the Net Offer will be available for allocation on a proportionate basis to Qualified Institutional Buyers. Further, not less than 15% of the Net Offer will be available for to Non-Institutional Bidders and not less than 35% of the Net Offer  will be available to Retail Individual Bidders.

The Selling Shareholder currently holds 90.40% of the pre-Offer paid-up capital of the Company. The object of the Offer is to carry out divestment of 33,693,660 Equity Shares held by the Selling Shareholder, wherein all proceeds of the Offer will go to the Selling Shareholder.

EIL has provided a range of engineering consultancy and project implementation services on more than 49 refinery projects, including eight greenfield refinery projects, seven petrochemical complexes, 35 oil and gas processing projects, 205 offshore platforms projects, 37 pipeline projects, 11 ports and storage and terminals projects, eight fertilizer projects and 26 mining and metallurgy projects. In the infrastructure space, it has provided a range of engineering consultancy services for more than 26 projects, including for airports, highways, flyovers, bridges, water and sewer management, as well as energy-efficient “intelligent” buildings. The Company has also completed 16 turnkey projects, including refinery and petrochemicals projects and offshore platforms.

About Engineers India Limited:

EIL was incorporated on March 15, 1965 under the Companies Act as a private limited company under the name Engineers India Private Limited pursuant to a formation agreement dated November 20, 1964 and in accordance with a memorandum of agreement dated June 27, 1964 between the GoI and Bechtel International Corporation. In May 1967, it became a wholly-owned GoI enterprise. In 1996, the GoI disinvested approximately 6.0% of its shareholding in the Company and it became a public listed company. It has two wholly-owned subsidiaries, Certification Engineers International Limited and EIL Asia Pacific Sdn. Bhd. incorporated in India and Malaysia, respectively, and two strategic joint venture companies, TEIL Projects Limited and Tecnimont EIL Emirates Consultores e Servico, LDA, incorporated in India and Portugal, respectively.

EIL is an engineering consultancy company providing design, engineering, procurement, construction and integrated project management services, principally focused on the oil and gas and petrochemicals industries in India and internationally. It also operates in a diverse set of other sectors including nonferrous mining and metallurgy and infrastructure. The Company is also a primary provider of engineering consultancy services for the Government of India's energy security initiative under its Integrated Energy Policy for strategic crude storages. EIL’s portfolio includes various technologies for petroleum refining, oil and gas processing and aromatics. It currently holds 10 patents and has 20 pending patent applications relating to various process technologies and hardware developed by the Company.

EIL’s services in these industries and sectors cover the entire spectrum of activities from concept to commissioning of a project. The Company's services 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.

EIL has leveraged its track record in India to successfully expand its operations internationally, and has provided a wide range of engineering consultancy services on various international projects, particularly in the Middle East, North Africa and South East Asia. It has established strategic international offices in Abu Dhabi, London, Milan and Shanghai to expand its international operations.

The Company's total income increased at a CAGR of 47.28% from Rs.6,876.5 million for the year ended March 31, 2007 to Rs.21,969.6 million in the year ended March 31, 2010, while its profit after taxation, as restated, increased at a CAGR of 47.31 % from Rs.1,390.0 million in the year ended March 31, 2007 to Rs.4,443.4 million in the year ended March 31, 2010.

During the quarter ended June 30, 2010 of the current financial year, EIL recorded a net profit of Rs. 1,145.6 million as against net profit of Rs. 942.2 million for the the corresponding quarter ended 30^th June 2009 of the previous financial year. The Net Sales for the quarter ended June 30, 2010 was Rs. 6,060.3 million as against Rs. 3,914.3 million for the corresponding quarter ended 30^th June 2009 of the previous financial year.