News Mania Desk/Agnibeena Ghosh/27th July 2024
Infrastructure construction firm Ceigall India is set to launch its initial public offering (IPO) on August 1, 2024. The offering will feature a combination of new equity shares and a sale of shares by existing shareholders, marking a significant milestone for the company. The price band for the IPO will be revealed on July 29, adding to the anticipation surrounding this public listing.
The Ceigall India IPO comprises a fresh issuance of equity shares worth Rs 684.3 crore, coupled with an offer-for-sale (OFS) of 1,41,74,840 equity shares by current stakeholders. The selling shareholders include the Sehgal family—comprising Ramneek Sehgal, Ramneek Sehgal and Sons HUF, Avneet Luthra, Mohinder Pal Singh Sehgal, Parmjit Sehgal, and Simran Sehgal. This OFS allows these investors to liquidate a portion of their holdings as part of the IPO process.
In a move to incentivize its employees, Ceigall India has allocated up to Rs 2 crore worth of shares for them. Employees may be able to acquire these shares at a discounted rate compared to the final issue price. The IPO will conclude on August 5, and the anchor book will open a day prior, on July 31, providing early investors an opportunity to secure shares before the public offering officially begins.
The allocation of shares from the net issue will be divided as follows: 50% reserved for qualified institutional buyers (QIBs), 35% for retail investors, and the remaining 15% for non-institutional investors, including high-net-worth individuals. This structure aims to balance the interests of different investor categories and attract a broad base of participants.
Ceigall India, based in Delhi, is predominantly owned by the Sehgal family, which holds a 99.99% stake. Kanwaldeep Singh Luthra is the sole public shareholder with a minor stake of 16,000 shares, representing 0.01% of the company’s paid-up equity. The company has evolved significantly over the past two decades, transforming from a small construction entity into a major player in the engineering, procurement, and construction (EPC) sector.
With an impressive order book valued at Rs 9,470.8 crore, including a substantial 80.3% share from the National Highway Authority of India (NHAI), Ceigall India has demonstrated its capability in executing large-scale projects. The company has completed over 34 projects, including 16 EPC ventures in the roads and highways sector, and currently has 18 ongoing projects, of which 13 are EPC projects and five are under the hybrid annuity model (HAM).
Proceeds from the IPO will be utilized for various purposes: Rs 99.8 crore will be allocated for acquiring new equipment, Rs 413.4 crore will be used to repay existing debt, and the remaining funds will support general corporate objectives. The company’s outstanding borrowings total Rs 1,883.4 crore. Ceigall India has exhibited substantial growth, with fiscal 2024 profits rising by 83% to Rs 306.1 crore compared to the previous year, and revenues increasing by 46.5% to Rs 3,029.4 crore.
The IPO’s EBITDA (earnings before interest, tax, depreciation, and amortization) for fiscal 2024 surged by 75.1% to Rs 517.7 crore, reflecting a margin expansion of 280 basis points to 17.1%. The company plans to finalize the basis of allotment by August 6 and credit equity shares to investors’ demat accounts by August 7. The stock is scheduled to debut on the stock exchanges on August 8.
ICICI Securities, IIFL Securities, and ICICI Securities are managing the public offering, with Link Intime India serving as the registrar. This IPO represents a key development in Ceigall India’s growth trajectory, offering investors a chance to participate in its future expansion.
