Ceigall India Limited an infrastructure construction company with experience in undertaking specialized structural work such as elevated roads, flyovers, bridges, railway over bridges, tunnels, highways, expressways and runways, has filed its Draft Red Herring Prospectus (DRHP) with capital market regulator Sebi to raise funds for its initial public offering (IPO).
The IPO has a face value of Rs 5 and consists of a fresh issue of Rs 617.69 crore and an offer for sale of up to 14.28 million equity shares by the Promoter and Promoter Group Selling Shareholders and Individual Selling Shareholder.
The offer for sale consists of the sale of equity shares of up to 4.28 million by Ramneek Sehgal, up to 7.59 million equity shares by Ramneek Sehgal and Sons HUF, up to 5,030 equity shares by Avneet Luthra, up to 9.27 lakh equity shares by Mohinder Pal Singh Sehgal, up to 5.53 lakh equity shares by Parmjit Sehgal, up to 9.22 lakh equity shares by Simran Sehgal and up to 1,677 equity shares by Kanwaldeep Singh Luthra. The offer includes a reservation for subscription by eligible employees.
The company, in consultation with the book-running lead managers, may consider a further issue of specified securities through a private placement, preferential allotment, rights issue or any other method aggregating to Rs 123.50 crore as "Pre-IPO placement". If such placement is completed, the fresh issue size will be reduced.
The Offer is being made through the book-building process, wherein not more than 50% of the offer shall be available for allocation on a proportionate basis to qualified institutional buyers, not less than 15% of the net offer shall be available for allocation to non-institutional investors, and not less than 35% of the net offer shall be available for allocation to retail individual investors.
The proceeds from the fresh issue, to the extent of Rs 118.78 crore will be used for purchase of equipment; Rs 344.50 crore for repayment/ prepayment, in full or in part, of certain borrowings availed by the Company and its Subsidiary, CIPPL; and General corporate purposes.
Ceigall India Limited was established in July 2002 and over the past two decades has evolved from a small construction firm to a prominent player in Engineering, Procurement, and Construction (EPC), specializing in the design and development of various road and highway projects, as stated in a CARE Report.
The Ludhiana-based company has emerged as one of the fastest-growing EPC companies in terms of three-year revenue Compound Annual Growth Rate (CAGR) up to Fiscal 2023, achieving a turnover exceeding ? 1,000 crore during Fiscal 2023. It achieved a remarkable year-on-year revenue growth of 82.67% in Fiscal 2023 among its peers. It has grown at a CAGR of 37.65% between Fiscals 2020 and 2023, according to the CARE Report quoted in its DRHP.
Ceigall has completed over 34 projects, including 16 EPC and one HAM project, in the roads and highways sector. Currently, it is involved in 15 ongoing projects, comprising 11 EPC projects and four HAM projects, encompassing elevated corridors, bridges, flyovers, rail overbridges, tunnels, expressways, runways, and multi-lane highways. Notably, the company completed the Malout-Abohar Project, its first HAM project, 214 days ahead of schedule.
Additionally, the company undertakes O&M activities as per contractual obligations and has a history of successful sub-contracting projects.
As of January 31, 2024, Ceigall's Order Book stands at ? 9,206.42 crore, with NHAI contributing 81.72% of the Order Book. Its clientele includes public sector entities like Indian Railway Construction International Limited ("IRCON"), Military Engineer Services ("MES") and Bihar State Road Development Corporation Limited ("BSRDCL"). The company has consistently maintained a high order book-to-bill ratio since FY21, indicating a robust pipeline of projects and revenue visibility for the future.
Ceigall has a proven track record in executing projects of varying sizes and complexities, from 20.42 lane km to 260.00 lane km in length, and has constructed over 1,739.88 lane kms of roads and highways as of December 31, 2023. Geographically, Ceigall has expanded its footprint to states including Punjab, Haryana, Rajasthan, Uttar Pradesh, Himachal Pradesh, Jammu and Kashmir, Jharkhand, Delhi, Maharashtra, and Bihar.
For fiscal 2022-23, the company's revenue from operations increased 82.41% to Rs 2,068.17 crore from Rs 1,133.79 crore in fiscal 2021-22, primarily driven by increase in revenue from construction contracts and sale of goods and materials. Profit after tax increased to Rs 167.27 crore in fiscal 2023 from Rs 125.86 crore in fiscal 2022.
For the nine months ended December 31, 2023, revenue from operations stood at Rs 2,085.76 crore, and profit after tax stood at Rs 196.20 crore.
ICICI Securities Limited, IIFL Securities Limited, and JM Financial Limited are the book-running lead managers for the IPO, and Link Intime India Private Limited is the registrar of the offer. The equity shares are proposed to be listed on the BSE and NSE. |
