Ceigall India IPO: GMP, Subscription Status, and Review—Should You Apply?
The second day of the infrastructure company Ceigall India Ltd.’s initial public offering (IPO) has concluded with impressive results. The IPO has seen every segment fully booked, showcasing strong investor interest. According to BSE data, the Ceigall India IPO subscription status was subscribed 1.23 times. Retail investors’ quota was subscribed 1.65 times, while the portion for non-institutional investors saw a 1.75 times subscription. The employee component was oversubscribed 5.47 times, and 1% of the amount is reserved for qualified institutional buyers (QIBs).
First-Day IPO Performance
On the first day of bidding, 61% of subscribers participated, indicating robust initial enthusiasm. This early momentum was further bolstered by the company securing ₹375 crore from anchor investors just a day before the public subscription period began.
IPO Price Range and Subscription Period
The price range for Ceigall India’s initial public offering is set between ₹380 to ₹401 per share. The IPO subscription period began on Thursday, August 1, and will continue until Monday, August 5.
Ceigall India: Company Background
Established in 2002, Ceigall India is a prominent construction company specializing in infrastructure projects. The company is involved in constructing flyovers, elevated roadways, bridges, railroad overpasses, tunnels, highways, expressways, and runways. As of June 2024, Ceigall India’s order book stood at a substantial ₹9,470 crore. Key clients include public sector organizations like Military Engineer Services, Indian Railway Construction International Ltd., and Bihar State Road Development Corporation Ltd.
Financial Performance
Ceigall India has demonstrated strong financial growth. The company’s operating revenue increased from ₹2,068.17 crore in fiscal 2023 to ₹3,029.35 crore in fiscal 2024, marking a 46.5% growth. Profit after taxes also saw a significant rise, reaching ₹304.3 crore from ₹167.27 crore.
Brokerage Reviews
Indsec Securities
Indsec Securities highlights Ceigall India’s expertise in civil construction, focusing on roads, highways, flyovers, bridges, railroad overpasses, tunnels, expressways, and runways. The company’s revenue, EBITDA, and APAT grew at a compound annual growth rate (CAGR) of 63.5%, 66.9%, and 55.5%, respectively, for FY22–24. With a return on equity (ROE) of 32.6% and a return on capital employed (ROCE) of 33.6% in FY24, Ceigall India exhibits strong financial health. The company’s order book provides over three years of revenue visibility, outpacing industry rivals. Indsec Securities attributes the company’s growth to its robust order book, a large National Highways Authority of India (NHAI) tendering pipeline, and a diversification strategy into other infrastructure sectors. The brokerage assigns a “Subscribe” rating to the IPO, citing confidence in the company’s improving return ratios, strengthening balance sheet post-debt repayment, and strong order book.
Nirmal Bang
Nirmal Bang commends Ceigall India’s track record of sales, EBITDA, and PAT growth. The company’s asset-light business model has led to higher ROCE and ROE compared to industry averages. With a manageable debt-to-equity ratio of 0.7x, the company’s financial leverage is expected to decrease further as borrowings are repaid using IPO proceeds. The brokerage emphasizes the federal government’s continued focus on infrastructure and capital expenditure, predicting growth in India’s infrastructure sector. Ceigall India’s P/E multiple stands at 22x, a premium over the industry average of 18x. Given the company’s strong growth record and higher ROCE, Nirmal Bang recommends a “Subscribe” rating, anticipating sustained premium valuations.
IPO Details
The Ceigall India IPO includes an offer-for-sale (OFS) of 1,41,74,840 equity shares by existing shareholders, including promoters, and a fresh issue of equity shares worth ₹684.3 crore by the company. The selling shareholders in the OFS are promoters Ramneek Sehgal, Ramneek Sehgal and Sons HUF, Avneet Luthra, Mohinder Pal Singh Sehgal, Parmjit Sehgal, and Simran Sehgal.
Utilization of IPO Proceeds
The company plans to use the net proceeds for general corporate purposes, equipment purchases, and partial or full repayment of certain loans. Additionally, the funds will support Ceigall Infra Projects Private Limited, a subsidiary of the company.
Registrar and Lead Managers
Grey Market Premium
As of today, the Ceigall India IPO GMP (grey market premium) is +53, indicating that Ceigall India shares are trading at a premium of ₹53 in the grey market, according to investorgain.com. Based on the upper end of the IPO price band and the current GMP, the estimated listing price of Ceigall India shares is ₹454 apiece, which is 13.22% higher than the IPO price of ₹401. Analysts at investorgain.com predict that the GMP will fluctuate, with a potential range between ₹0 and ₹140.
The grey market premium reflects investors’ willingness to pay more than the issue price, showcasing confidence in the company’s future prospects.
Conclusion
Ceigall India’s IPO has garnered significant interest from various investor segments, driven by the company’s strong financial performance, extensive order book, and promising growth prospects in the infrastructure sector. Both Indsec Securities and Nirmal Bang have issued “Subscribe” ratings, highlighting the company’s robust fundamentals and strategic advantages. With a positive grey market premium and a well-defined utilization plan for the IPO proceeds, Ceigall India is well-positioned for a successful public offering.
Disclaimer: The opinions and recommendations provided above reflect the views of individual analysts or brokerage firms and do not represent those of OSTP Media. We recommend that investors consult with certified experts before making any investment decisions.
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