Engineers India Limited (EIL), an engineering and technical service company is planning to raise about approx. Rs. 1,200 crore ($266 million) by way of a follow on issue, valuing the company at a whopping Rs. 12,000 crore ($2.6 billion). Government owns 90.40 per cent stake in EIL and it is under the administrative control of Ministry of Petroleum and Natural Gas.

The law firm that will advise EIL on the proposed offering will be selected through a bidding process. Leading firms such as Luthra & Luthra, Amarchand & Mangaldas, S&R Associates, Axon Partners LLP, Link Legal and Crawford Bayley will be fighting for the advisory position. It is understood that each law firm, beginning with Link Legal will get a 30-minute window to make their pitch to the Government which will commence this morning. The Government has adopted a strategy of choosing legal advisors and investment banks by a bidding process, where major law firms and banks bid to advise the Government. This trend was noticed last year for the offerings by National Mineral Development Corporation (NDMC) and SJVN Limited (SJVN) and has continued with the recent appointment of advisors on the Coal India IPO, where the Government of India is set to rake Rs. 40,000 crore ($8.8 billion).

Bar and Bench, had reported when the London branch of France-headquartered, Gide Loyrette Nouel LLP, along with Crawford Bayley & Co. had advised the Government on the stake sale by NMDC. FoxMandal Little were appointed the legal advisors to the Government in the SJVN divestment, along with their international consortium partners, K&L Gates LLP. Government had appointed these law firms through a similar bidding process.

Prior to the introduction of the bidding mechanism for appointment of legal advisors, Amarchand had bagged the role of the legal advisor to the Government on most offerings including NHPC, NTPC, Powergrid and Oil India. Surprisingly, FoxMandal Little, Khaitan and Co., who have previously bid for Government disinvestment process, are not in the race for EIL.

It is well known in the legal circles that just like the investment banks, law firms look at the Government disinvestment deals as high profile but fee compromising transactions. As more often than not, the legal fee on such deals is very less as compared to equivalent private transactions.