Engineers India Said To Junk Acquisition Of Projects & Development India
A refinery stands illuminated in Golaghat, India. (Photographer: Adeel Halim/Bloomberg)

Engineers India Said To Junk Acquisition Of Projects & Development India

State-run Engineers India Ltd. has junked its plan to acquire Projects & Development India Ltd., another government-owned entity, according to a person aware of the development.

EIL had placed a conditional bid to acquire PDIL, and all conditions for the acquisition could not be met, the person said requesting anonymity.

Some of the conditions like setting up a laboratory in Noida were accepted but others could not be accepted, the person cited above said.

In September 2018, Engineers India told the stock exchanges that the company’s board had approved a proposal to acquire 100 percent stake in PDIL from the government by “share acquisition route”. The company did not share more details citing “confidentiality”.

An email to EIL seeking clarity remained unanswered.

The process to divest PDIL will have to start afresh, said the official cited earlier.

State-owned PDIL comes under the Ministry of Chemicals and Fertilizers, and provides design engineering and consultancy services. It serves fertiliser and allied chemical industries, oil and gas sector, power and infrastructure sectors in India and abroad.

PDIL counts Aditya Birla Group, Bharat Heavy Electricals Ltd., Petroliam Nasional Bhd and Tanzania Petroleum Development Corp., among others, as its clients. The PSU has been reporting back-to-back losses, which widened from Rs 8.92 crore in 2015-16 to Rs 10.58 crore in 2016-17, according to its 2018 annual report.

EIL’s acquisition of PDIL will bring synergy in the fertiliser business, Kotak Securities had said in a research note in March, citing Engineers India’s management being confident that the PDIL acquisition will be “value accretive” in the long term.

PDIL has an efficient employee base and EIL could enhance its reach into new geographies, the brokerage had said.

On Wednesday, EIL shares rose 2.86 percent to Rs 105.95 apiece on the BSE while the benchmark Sensex gained 0.44 percent to end the day at 36,724.74 points.

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