Ceigall India IPO sails through on Day 2 so far; HNI & retail portions fully booked

The initial public offering (IPO) of Ceigall India continued to see a muted response from the investors during the second day of the bidding process. However, the issue, which was subscribed 61 per cent at the end of Day 1, managed to sail through and fetched more than 90 per cent of subscription.
 

The Ludhiana-based Ceigall India is selling its shares in the price band of Rs 380-401 apiece. Investors can apply for a minimum of 37 shares and its multiples thereafter. It is looking to raise Rs 1,252.66 crore via IPO, which includes a fresh share sale of Rs 684.25 crore and an offer-for-sale (OFS) of 14,174,840 equity shares.
 

According to the data, the investors made bids for 2,18,45,614 equity shares, or 98 per cent, compared to the 2,23,13,663 equity shares offered for the subscription by 2.00 pm on Friday, August 02. The three-day bidding for the issue will conclude on Monday, August 05.
 

The allocation for non-institutional investors (NIIs) was subscribed 1.32 times, while the portion reserved for retail investors saw a subscription of 1.35 times. Portion for employees was booked 4.85 times. However, the quota set aside for qualified institutional bidders (QIBs) quota was to see any significant bids as of the time.
 

Incorporated in 2002, Ceigall India is an infrastructure construction company with expertise in specialized structural projects, including elevated roads, flyovers, bridges, railway overpasses, tunnels, highways, expressways, and runways. The company completed over 34 road and highway projects as of July 2024.
 

The grey market premium of Ceigall India has taken a big hit amid the rising volatility in the markets and muted bidding. Last heard, the company was commanding a premium of Rs 70 in the unofficial market, suggesting a listing pop of about 17-18 per cent for the investors. However, the premium in the grey market stood around Rs 88-90 on the first day of the bidding.
 

Brokerage firms are mostly positive on the issue suggesting investors to subscribe to it for a long term citing its strong revenue growth, best in industry ROE, sound execution track record and plans to reduce debt as the key positives of the company, while stretched valuations and limited order book are the major concerns.
 

Over the last two decades, Ceigall has transitioned from a small construction company to an established EPC player. It recently acquired a 50 per cent stake in RK Infra, which will benefit the company in terms of project execution capabilities and bidding credentials for future projects. The IPO is reasonably priced, with a 'subscribe' rating., said Motilal Oswal.
 

Ceigall India mobilised Rs 375.2 crore from anchor investors as it allotted 93.56 lakh shares at a Rs 401 apiece. For the financial year ended on March 31, 2024, Ceigall India reported a net profit of Rs 304.91 crore with a revenue of Rs 3,066.19 crore. The company net profit stood at Rs 167.70 crore with a revenue of Rs 2,087.04 crore for the financial year 2022-23.
 

Ceigall India has reserved shares worth Rs 2 crore for its eligible employees, who will get a discount of Rs 38 per share during the bidding. It has reserved 50 per cent of the net offer for the qualified institutional bidders, while retail investors will have 35 per cent of the net offering and remaining 15 per cent of the net offer will be allocated to non-institutional investors.
 

Ceigall India is a fast-growing EPC firm with a robust order book and proven expertise, is ideal for medium to long-term investment despite reliance on government contracts and sector dependencies, said Master Capital Services in its IPO note.
 

IIFL Securities, ICICI Securities and JM Financial are the book running lead managers of the Ceigall India IPO, while Link Intime India is the registrar for the issue. Shares of the company are set to debut on both BSE and NSE tentatively on August 08, Thursday.

 

 

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