Ceigall India IPO to open for subscription on August 1

29 Jul 2024 , 10:20 AM

Ceigall India Ltd, a prominent player in the infrastructure sector, has announced a price band of ₹380-401 per share for its upcoming initial public offering (IPO). The IPO is set to open for subscription on August 1 and will close on August 5, with anchor bidding starting on July 31.

IPO Structure and Financial Details

The IPO comprises a fresh issuance of equity shares worth ₹684.3 Crore and an offer-for-sale (OFS) of 1,41,74,840 equity shares by existing shareholders, including promoters. At the upper end of the price band, the OFS is valued at approximately ₹568.41 Crore, bringing the total issue size to around ₹1,253 Crore.

Prominent selling shareholders in the OFS include promoters Ramneek Sehgal, Ramneek Sehgal and Sons HUF, Avneet Luthra, Mohinder Pal Singh Sehgal, Parmjit Sehgal, and Simran Sehgal.

Use of IPO Proceeds

The proceeds from the fresh issuance will be allocated as follows:

1. Equipment Purchase: Ceigall India plans to use ₹99.8 Crore for purchasing new equipment to enhance its project execution capabilities.
2. Debt Repayment: A significant portion, ₹413.4 Crore, will be utilized to repay outstanding borrowings, which currently stand at ₹1,883.4 Crore.
3. General Corporate Purposes: The remaining funds will be used for general corporate purposes, aiding in the company’s overall growth and operational efficiency.

Company Background and Performance

Ceigall India has evolved from a small construction company into a major engineering, procurement, and construction (EPC) player over the past two decades. The company’s order book stands at ₹9,470.8 Crore, with 80.3% of projects coming from the National Highway Authority of India (NHAI). Ceigall India has successfully completed over 34 projects, including 16 EPC projects in the roads and highways sector. Currently, the company has 18 ongoing projects, comprising 13 EPC projects and five hybrid annuity model (HAM) projects.

Financial Performance

Ceigall India has demonstrated robust growth in recent years. For the fiscal year 2024, the company’s profit increased by 83% to ₹306.1 Crore, compared to the previous fiscal year. Revenue also saw a significant rise, growing by 46.5% to ₹3,029.4 Crore. The company’s EBITDA (earnings before interest, tax, depreciation, and amortization) for FY24 grew by 75.1% to ₹517.7 Crore, with a margin expansion of 280 basis points (bps) to 17.1%, compared to the previous fiscal year.

IPO Allotment and Listing Details

The company will finalize the basis of allotment for the IPO shares by August 6 and credit equity shares to the demat accounts of eligible investors by August 7. The stock is scheduled to debut on the bourses on August 8.

IIFL Capital Services and ICICI Securities are the appointed merchant bankers managing the IPO, while Link Intime India is serving as the registrar for the offer.