Ceigall India IPO Makes A Tepid Debut; Lists At 4% Premium
The IPO consists of a fresh issue of up to Rs 6,842.52 million and an offer for sale (OFS) of up to 1,41,74,840 equity shares
Ceigall India initial public offering (IPO) made a tepid debut on the exchanges as the issue listed on merely 4.49 per cent premium on the National Stock Exchange (NSE) at Rs 419 against its issue price of Rs 401.
Ceigall India, an infrastructure construction company fixed the price band of Rs 380 to Rs 401 per equity share.
The IPO consisted of a fresh issue of up to Rs 6,842.52 million and an offer for sale (OFS) of up to 1,41,74,840 equity shares by promoter selling shareholders and individual selling shareholders.
The proceeds from the fresh issue, to the extent of Rs 997.89 million will be used for purchase of equipment, Rs 4,134 million for repayment, in full or in part, of certain borrowings availed by the company and its subsidiary and general corporate purposes.
ICICI Securities, IIFL Securities, and JM Financial were the book running lead managers and Link Intime India was the registrar to the offer.
“Ceigall’s growth is driven by the company’s strategic focus on road projects and specialized structures, its ability to secure new projects, and its efficient business model. The recent partnership with Delhi Metro for rail infrastructure further enhances its growth prospects. Given these factors, investors who have been allotted shares are encouraged to ‘hold’ their investment for the medium to long term to potentially benefit from the company’s future growth,” said Parth Shah, Research Analyst, StoxBox.
Ceigall India’s revenue from operations increased by 46.48 per cent from Rs 20,681.68 million in the Fiscal 2023 to Rs 30,293.52 million in the Fiscal 2024, primarily driven by increase in revenue from construction contracts, and revenue from sale of goods and materials and Finance income on financial assets carried on amortised cost.
The company recorded a significant increase in its profit for the year by Rs 1,672.72 million in the fiscal 2023 to Rs 3,043.07 million in the fiscal 2024. The company has grown at a CAGR of 50.13 per cent between fiscals 2022 to 2024.
The Ludhiana-based company's principal business operations are broadly divided into EPC projects and hybrid annuity model (HAM) projects, spread across over ten states in India. As on 30 June 2024, the company's order book was Rs 94,708.42 million.
The company has completed over 34 projects, including 16 EPC, one HAM, five O&M and twelve item rate projects, in the roads and highways sector. Currently, it has 18 ongoing projects, including 13 EPC projects and five HAM projects which includes elevated corridors, bridges, flyovers, rail over-bridges, tunnels, expressway, runway, metro projects and multi-lane highways.
