Ceigall India shares list at 4.4% premium over IPO price
Shares of Ceigall India made a muted debut on the stock exchanges on Thursday, in an otherwise weak broader market, listing at ₹419 on the NSE, a premium of 4.4% over the IPO price of ₹401 per equity share. On the BSE, the share price of construction company opened higher at 413, up 3% over the issue price.
Post listing, Ceigall shares surged as much as 6% to hit a high of ₹425 on the BSE, while the market capitalisation of the company rose to ₹7,277.41 crore. Meanwhile, the BSE Sensex was trading lower by 288 points, or 0.36%, at 79,179, and the NSE Nifty was down by 81 points, or 0.33%, at 24,216.
The debut of the Ludhiana-based infrastructure construction firm was broadly in line with D-Street expectations as the stock was commanding a grey market premium (GMP) of ₹15 apiece in the unofficial market, signaling the listing price to be around ₹418.5 per share, up 4.3% over the issue price. The GMP has fallen sharply from its peak of ₹140 on July 28, 2024.
“While the IPO received a respectable subscription of 14 times, the actual listing performance fell short of initial expectations, likely influenced by the prevailing market conditions,” says Shivani Nyati, Head of Wealth, Swastika Investmart Ltd.
“The company's strong focus on specialised infrastructure projects and efficient execution model remain its key strengths. However, the moderate listing highlights the challenges posed by significant contingent liabilities, reliance on government contracts, and intense competition,” says Nyati.
Shivani further adds that Ceigall India's long-term prospects, despite the muted listing, hinge on its ability to effectively manage these challenges and capitalise on its core competencies. She recommended investors to ‘hold’ their position by keeping a stop loss of ₹378.
The three-day IPO of Ceigall India closed on August 5, with the issue subscribing 13.75 times on the final day of bidding. The ₹1,253-crore issue of Ceigall received bids of 30,67,00,770 shares against the offered 2,23,13,663 equity shares, at a price band of ₹380-401, according to the data available on the stock exchanges.
The exchange data showed that the QIB portion was subscribed 31.50 times, while the portion set aside for NIIs and retail investors was booked 14.39 times and 3.71 times, respectively. The employee portion was subscribed 11.16 times. The company had reserved half of the issue for qualified institutional buyers, 15% for non-institutional bidders, and remaining 35% for retail investors.
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Ceigall India raised ₹1,253-crore via IPO, at a market capitalisation of ₹7,194.66 crore, comprising fresh equities worth ₹684.3 crore and an offer for sale (OFS) of equity shares worth ₹568.41 crore by existing shareholders including promoters. Out of the proposed ₹684.3 crore fundraising from fresh equities, the company intends to use ₹99.79 crore for the purchase of equipment; ₹413.4 crore for repayment of loans availed by the company and its subsidiary, CIPPL. The remaining fund will be used to meet general corporate purposes.
Incorporated in 2002, Ceigall India has completed over 34 projects across ten states in India with experience in specialised structural work such as elevated roads, flyovers, bridges, railway overbridges, tunnels, highways, metros, expressways and runways. It is among the fastest growing engineering, procurement and construction (EPC) company at a CAGR of 50.13% between fiscals 2022 to 2024. Its principal business operations are broadly divided into EPC projects and hybrid annuity model (HAM) projects, spread across over tenstates in India. As on June 30, 2024, the company's order book stood at ₹9,470.84 crore.
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