Ceigall India IPO: Price Band ₹380 to ₹401 Per Share
Ceigall India Limited, an infrastructure construction company specializing in complex structural work, is launching its IPO with a price band of ₹380 to ₹401 per share. The company has over 20 years of experience and has established itself as one of India's fastest-growing EPC companies. This document provides key details about the IPO, company background, financials, and important dates for investors.
RD
by RA ALOK DAIYA
About Ceigall India Limited
Ceigall India Ltd. (CIL) is an infrastructure construction company with over 20 years of experience in the industry. The company specialises in undertaking complex structural work such as elevated roads, flyovers, bridges, railway over bridges, tunnels, highways, expressways, and runways. CIL has established itself as one of India's fastest-growing engineering, procurement, and construction (EPC) companies, achieving a remarkable three-year revenue CAGR as of Fiscal 2024 among companies with a turnover exceeding ₹1000 crore.
Since its incorporation in July 2002, Ceigall India has transitioned from a small construction company to a well-established EPC player. The company has demonstrated expertise in designing and constructing various road and highway projects, including specialised structures, across 10 states in India. Its growth trajectory is impressive, with a CAGR of 50.13% between Fiscal years 2021 and 2024.
1
2002
Ceigall India incorporated as a small construction company
2
2006
Completed initial road project for Punjab Public Works Department
3
2024
Established as a leading EPC player with projects across 10 states
Business Operations and Capabilities
Ceigall India's principal business operations are divided into two main categories: EPC projects and hybrid annuity model (HAM) projects. The company has steadily increased its execution capabilities over the years. From its initial road project for the Punjab Public Works Department in 2006, with an aggregate project cost of ₹6.29 crore for 20.42 lane km, CIL has progressed to handling much larger projects. As of the date of the Red Herring Prospectus, the company is eligible to bid for single NHAI EPC projects up to a value of ₹5700 crore and single NHAI HAM projects up to a value of ₹5500 crore.
EPC Projects
Ceigall India specializes in Engineering, Procurement, and Construction projects for infrastructure development.
HAM Projects
The company also undertakes Hybrid Annuity Model projects, a public-private partnership model in infrastructure development.
Project Bidding Capacity
Eligible to bid for NHAI EPC projects up to ₹5700 crore and NHAI HAM projects up to ₹5500 crore.
Project Portfolio and Order Book
Ceigall India has completed over 34 projects in the roads and highways sector, including 16 EPC, one HAM, five O&M, and 12 Item Rate Projects. It has 18 ongoing projects, comprising 13 EPC projects and five HAM projects. These projects include elevated corridors, bridges, flyovers, rail over-bridges, tunnels, expressways, runways, metro projects, and multi-lane highways.
The company's Order Book has shown consistent growth, amounting to ₹9470.84 crores, ₹9225.78 crores, ₹10809.04 crores, and ₹6346.13 crores as of June 30, 2024, and Fiscals 2024, 2023, and 2022, respectively. Ceigall India has built a reputation for delivering quality projects, often completing them on time or ahead of schedule. As of March 31, 2024, the company had 2256 employees on its payroll, with additional contract labourers hired as needed.
Highlights of the Ceigall India IPO
Issue Details
The Ceigall India IPO is a book-built issue of ₹1,252.66 crores, combining a fresh issue of 1.71 crore shares aggregating ₹684.25 crores with an offer for sale of 1.42 crore shares aggregating ₹568.41 crores.
Price Band
The price band for the issue is set at ₹380 to ₹401 per share. The total issue size comprises 31,238,480 shares, which, at the upper price band of ₹401 per share, aggregate to ₹1,252.66 crore.
Employee Discount
The company has offered an employee discount of ₹38 per share.
Use of Funds
The fresh issue funds will be used for the purchase of equipment and the repayment/prepayment of certain borrowings taken out by the Company and its Subsidiary, Ceigall Infra Projects Private Limited.
Key Dates for Ceigall India IPO
The Ceigall India IPO opens on Thursday, August 1, 2024, and closes on Monday, August 5, 2024. The bid date is from August 1, 2024, at 10.00 AM to August 5, 2024, at 5.00 PM. The Cut-off time for UPI Mandate confirmation is 5 PM on the issue closing day, which is August 5, 2024.
IPO Allocation and Minimum Investment Lot Size
Ceigall India Limited has announced the breakdown of the overall IPO in terms of allocation to various categories, as captured in the table below.
The minimum lot size for the IPO investment will be 37 shares. The table below breaks down the lot sizes for different categories.
Financial Highlights of Ceigall India Limited
Ceigall India Limited has demonstrated strong financial performance over the past three years, with consistent revenue growth and improving profitability. The company's revenue from operations has grown significantly from ₹8,732.02 million in Fiscal 2021 to ₹20,681.68 million in Fiscal 2023, representing a CAGR of 53.86%. For the nine months ended December 31, 2023, the company has already surpassed its full-year revenue for Fiscal 2023.
The company's EBITDA has also grown robust, increasing from ₹1,597.33 million in Fiscal 2021 to ₹2,956.29 million in Fiscal 2023. The EBITDA margin, however, has seen a slight decline from 18.29% in Fiscal 2021 to 14.29% in Fiscal 2023 but has improved to 16.94% for the nine months ended December 31, 2023.
At the upper price band of ₹401 per share, the P/E ratio based on FY2023 earnings stands at approximately 42.5x. While this valuation may seem high, it's important to consider the company's strong growth trajectory and improving profitability metrics. The infrastructure construction sector, particularly in road and highway projects, has seen significant government focus and investment, which bodes well for companies like Ceigall India Limited.
1
Strong Revenue Growth
CAGR of 53.86% from Fiscal 2021 to 2023
2
Robust EBITDA Growth
Increased from ₹1,597.33 million in Fiscal 2021 to ₹2,956.29 million in Fiscal 2023
3
High P/E Ratio
Approximately 42.5x based on FY2023 earnings at upper price band