Engineers India FPO Review

Engineers India (EIL) is making a follow-on public offer (FPO), for 3.37 crore equity shares of Rs.5 each, in the price band of Rs. 270 to Rs. 290 per share. EIL,is one of the leading engineering consultancy company, has its focus on oil and gas and petrochemicals industries.

Details of the issue:
Issue Open: Jul 27, 2010 - Jul 30, 2010
Issue Size: 33,693,660 Equity Shares of Rs. 5.
Issue Price: Rs. 270 - Rs. 290 Per Equity Share
Market Lot: 20 Shares.
Listing At: BSE, NSE.
Discount of 5% is available for retail investors.

Some Fundamentals:
For FY10, the company reported net profit of Rs. 444 crore, resulting in an EPS of Rs. 13.19 on the present equity of Rs. 168 crore. The company is expected to report FY11 EPS of about Rs.15. At the upper end of the price band of Rs. 290, the issue is priced at a PE multiple of 19.33 times, based on FY11 earnings estimates.

Though the current price of EIL is around Rs. 310, the issue is not terribly expensive. Hence big listing gains cannot be expected, but one can apply with medium view, since the prospects are good as well as the 5% discount offers some cushion.