Ceigall India’s Upcoming IPO: A Comprehensive Guide

Ceigall India, a prominent player in the infrastructure construction sector, is set to launch its initial public offering (IPO) on August 1. With a mix of fresh equity issuance and an offer-for-sale (OFS) by existing shareholders, this IPO is creating significant buzz in the market. In this article, we’ll delve into the details of Ceigall India’s IPO, the company’s background, its financial performance, and the prospects for investors.

History and Evolution

Ceigall India has transformed from a small construction firm into a significant player in the Engineering, Procurement, and Construction (EPC) sector over the past two decades. Specializing in infrastructure projects, particularly roads and highways, the company has built a robust portfolio and reputation.

Promoters and Shareholders

The company is promoted by the Sehgal family, including Ramneek Sehgal, Ramneek Sehgal and Sons HUF, Avneet Luthra, Mohinder Pal Singh Sehgal, Parmjit Sehgal, and Simran Sehgal. The family collectively holds 99.99% of the company’s shares.

IPO Details

Important Dates

IPO Opening Date: August 1
Anchor Book Opening: July 31
IPO Closing Date: August 5
Basis of Allotment Finalization: August 6
Credit of Shares to Demat Accounts: August 7
Stock Market Debut: August 8

Price Band Announcement

The price band for the IPO will be announced on July 29, providing potential investors with crucial information to make informed decisions.

IPO Structure

Fresh Issuance and Offer-for-Sale

The IPO consists of a fresh issuance of equity shares worth Rs 684.3 crore and an OFS of 1,41,74,840 equity shares by existing shareholders.

Reservation for Employees

Ceigall India has reserved up to Rs 2 crore worth of shares for its employees, who may receive shares at a discount to the final issue price.

Promoter and Shareholding Information

Promoters’ Shareholding

The Sehgal family collectively owns 99.99% of Ceigall India’s shares, indicating strong promoter confidence and control over the company.

Public Shareholding

Kanwaldeep Singh Luthra is the only public shareholder, holding 16,000 shares, representing 0.01% of the paid-up equity.

Use of IPO Proceeds

Equipment Purchase

Rs 99.8 crore from the fresh issue proceeds will be allocated for purchasing new equipment, enhancing the company’s operational capabilities.

Debt Repayment

A significant portion, Rs 413.4 crore, will be used to repay existing debts, strengthening the company’s balance sheet and reducing interest expenses.

General Corporate Purposes

The remaining funds will be used for general corporate purposes, providing flexibility for future strategic initiatives.

Financial Performance

Revenue Growth

Ceigall India has demonstrated impressive revenue growth, with a 46.5% increase to Rs 3,029.4 crore in fiscal 2024.

Profit Increase

The company’s profit grew by 83% to Rs 306.1 crore in fiscal 2024, reflecting efficient operations and cost management.

EBITDA Margin Expansion

EBITDA grew by 75.1% to Rs 517.7 crore, with a margin expansion of 280 basis points to 17.1%, indicating improved profitability.

Order Book and Project Portfolio

Current Order Book

Ceigall India has a robust order book of Rs 9,470.8 crore, with 80.3% of projects from the National Highway Authority of India (NHAI).

Completed Projects

The company has completed over 34 projects, including 16 EPC projects, showcasing its extensive experience and capability.

Ongoing Projects

Ceigall India is currently managing 18 projects, including 13 EPC projects and 5 Hybrid Annuity Model (HAM) projects, highlighting its active engagement in infrastructure development.

Comparison with Peers

Key Competitors

Ceigall India compares itself with KNR Construction, J Kumar Infraprojects, ITD Cementation India, PNC Infratech, GR Infraprojects, and HG Infra Engineering, positioning itself among well-established players in the industry.

Market Position

With significant growth and a strong order book, Ceigall India is well-positioned in the competitive infrastructure construction market.

Investment Considerations

Strengths and Opportunities

Strong financial performance and growth
Robust order book with prestigious clients like NHAI
Experienced promoters with extensive industry knowledge

Risks and Challenges

High dependency on government projects
Exposure to regulatory and political risks
Intense competition in the infrastructure sector

IPO Timeline and Allotment

Key Dates for Investors

Investors should note the following important dates:

Anchor Book Opening: July 31
IPO Opening: August 1
IPO Closing: August 5
Allotment Finalization: August 6
Credit of Shares: August 7
Listing Date: August 8

Allotment and Credit of Shares

The basis of allotment will be finalized by August 6, and shares will be credited to investors’ demat accounts by August 7, ensuring a smooth transition to the stock market debut on August 8.

Market Debut

Listing Date

Ceigall India’s stock will debut on the bourses on August 8, marking a significant milestone for the company.

Merchant Bankers and Registrars

ICICI Securities, IIFL Securities, and ICICI Securities are the appointed merchant bankers for the IPO, while Link Intime India serves as the registrar.

Conclusion

Ceigall India’s upcoming IPO presents a compelling opportunity for investors to participate in the growth of a well-established infrastructure company. With a strong financial track record, a robust order book, and strategic use of IPO proceeds, Ceigall India is poised for continued success in the infrastructure sector.

Disclaimer: Opinions and recommendations are from individual analysts and firms, not OSTP Media. Investors should consult certified experts before making decisions.

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