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Ceigall India Limited is an infrastructure construction company with expertise in specialized structural projects, including elevated roads, flyovers, bridges, railway overpasses, tunnels, highways, expressways, and runways. Ceigall India IPO is raising Rs 1,252.66 crores. The issue is a combination of fresh issue of 1.71 crore shares aggregating to Rs 684.25 crores and offer for sale of 1.42 crore shares aggregating to Rs 568.41 crores.

Ceigall India : About The Company

• They are an infrastructure construction company with experience in undertaking specialized structural works such as elevated roads, flyovers, bridges, Railway over bridges (ROB), tunnels, highways, expressways and runways.
• They ahve completed over 34 projects across ten states in India with experience in undertaking specialized structural work such as elevated roads, flyovers, bridges, railway over bridges, tunnels, highways, metros, expressways and runways.
• Their business model is broadly divided into EPC projects, Hybrid Annuity Model (“HAM”) projects and O&M. Under EPC projects and O&M.
• Company has completed over 34 projects, including 16 EPC, one HAM project, five O&M and 12 Item Rate Projects, in the roads and highways sector. Currently, our Company has 18 ongoing projects, including 13 EPC projects and five HAM projects.

Ceigall India IPO: Financials

Anchor Book: Ceigall India IPO

• Ceigall India, garnered ₹375.20 crores from anchor investors ahead of its initial public offering.
• Foreign and Domestic Institutions who participated in the anchor were Nomura Funds Ireland Public Ltd – India Equity Fund, ICICI Prudential Flexicap Fund, HDFC Smallcap Fund, HDFC Trustee Company Ltd, Nippon Life India Smallcap Fund, Kotak Infrastructure & Economic Reform Fund, Axis Mutual Fund, Bandhan Infrastructure Fund, SBI General Insurance Company, Nataxis International Fund, Carmignac Portfolio, Goldman Sachs (Singapore) PTE- ODI, Tata Multicap Fund, Tata Dividend Yield Fund, ICICI Prudential Life Insurance Company Ltd, Bajaj Allianz Life Insurance Company Ltd, Max Life Insurance Ltd, Edelweiss Trusteeship Co. Ltd. Bank of India Manufacturing & Infrastructure Fund, Universal Sompo General Insurance Company Ltd, Hero Venture Trust, Integrated Core Strategies(Asia) PTE., Ltd. Societe Generale, Morgan Stanley Asia (Singapore) PTE., Citigroup Global Markets Mauritius Pvt. Ltd.
• The anchor book saw interest by 9 domestic mutual funds across 13 schemes, totaling approximately ₹204.10 crore, which represents 54.40% of the Total Anchor Book Size.

Salient Points: Ceigall India IPO

• Key growth drivers for infrastructure sector are rapid urbanisation, higher budgetary outlay towards infrastructure, smart cities mission.
• From the net proceeds from fresh issue, about Rs 100 crore will be used to fund purchase of equipment, Rs 413. crore towards repayment and pre-payment of certain borrowings in part or full availed by the company and balance towards general corporate purposes.
• Company started with Operations in Punjab and gradually expanded to road and highway projects in other states in India. About 50% of revenue came from Punjab and 23%-33% came from Uttar Pradesh in last two years.
• The projects were spread across six states in FY 2023 and have now expanded to 10 states by FY 2024.
• The order book stood at Rs 9470 crore as on June 30, 2024. 
• Out of the current order book, 80% of the projects have been awarded by NHAI and rest were contracts from other central, state governmental and local departments.

• Compared to listed peers

• Over the last few years, Ceigall has transitioned from a small construction company to largest EPC player, gaining expertise in the design and construction of various road and highway projects including specialized structures.
• The company is eligible to bid for single NHAI EPC projects up to a value of Rs 5700 crore and single NHAI HAM projects of upto Rs 5500 crore.
• It is empaneled to participate with the Delhi Metro Rail Corporation Limited for upcoming tenders. While most of the revenue comes from roads, the company recently entered into metro construction and has bagged 2 projects.
• The company has grown at a CAGR of 50% between Fiscals 2021 to 2024 5 with revenues of Rs. 873 cr in FY21 to Rs. 3,029 cr in FY24. The period saw EBITDA rising at 48% and net profit rose at 40% CAGR, to Rs. 306 cr.
• Company has achieved a high gross fixed asset turnover ratio of 7x .
• It has a 30% plus RoE (highest among peers) and net debt equity ratio will drop to 0.14:1 from 0.78:1 post conclusion of IPO.
• It has completed 7 projects ahead of schedule with 2 projects getting bonus for early completion.
• I intend to apply in Ceigall India IPO. The company has Selectively expand the geographical footprint and has a healthy orderbook giving long term revenue visibility. Due to high valuations being demanded in the IPO, upside may be limited.
• GMP as reported on social media has been Rs. 60(15%)
• This post is exploratory and educational purposes only. Please do your own diligence before investing in SME IPOs like this.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.