On Thursday, Ceigall India’s stock had its market debut at a 4.5% premium. In contrast to the issue price of Rs 415, the stock listed for Rs 419 on the NSE and Rs 413 (a 3% premium) on the BSE. The company’s shares were trading in the unlisted market with a GMP of Rs 14 prior to listing.
Investors responded strongly to the initial public offering (IPO), which comprised a new equity issuance of Rs 617.69 crore and an offer for sale (OFS) of up to 1.42 crore shares, with an overall subscription of 13.78 times. The money raised from the new issuance will go toward buying machinery, paying off or prepaying some of the loans.
Company’s Improvement In Revenue
Since its founding in July 2002, Ceigall India—which specialises in the design and development of road and highway projects—has expanded from a tiny construction company to a major force in the engineering, procurement, and construction (EPC) industry.
From fiscal 2022 to 2024, revenue, EBITDA, and PAT achieved compound annual growth rates (CAGRs) of 63.5%, 66.9%, and 55.5%, respectively, demonstrating the company’s constant improvement in revenue and profitability. The PAT margin was 10% and the EBITDA margin was 17% in FY24.
Revenue Visibility
The return ratios held steady throughout the same period, with RoE standing at 33.6% and RoCE at 31.9%. Strong revenue visibility for the upcoming years is ensured by Ceigall’s order book, which as of June 2024 was valued at Rs 9,471 crore, or 3.2 times its revenue for the fiscal year 2024. Of the order book, 61% are EPC.
The issue’s registrar was Link Intime India, and the book-running lead managers were IIFL Securities, ICICI Securities, and JM Financial.
