Ceigall India IPO - Investment Rationale, Issue Details, Financials, Risks And More: Anand Rathi

Anand Rathi Report

Ceigall India Ltd. will launch its initial public offering on August 1 and the offer will close on Aug. 05. The company has set a price band of Rs 380-401 per share, with a face value of Rs 5 each. The minimum lot size for bidding will be 37 shares.

The Rs. 1253 crore IPO comprises of fresh issue of 1.71 crore shares aggregating to Rs 684.25 crore and an offer-for-sale of 1.42 crore shares aggregating to Rs 568.41 crore.

Objects of fresh issue

• Purchase of equipment.

• Repayment/ prepayment, of certain borrowings by them or subsidiary.

• General corporate purposes.

Valuation and Outlook

Ceigall India is among the fastest-growing engineering, procurement, and construction companies, based on a three-year compound annual growth rate (CAGR) in revenue as of Fiscal Year 2024.

The company has a strong order book spread across various business sectors and geographical regions allowing them to pursue a wider range of project tenders, thereby maximizing their business volume and profit margins.

The company's P/E ratio is 22.9 times based on its FY24 earnings, with a market capitalization of Rs 69,854 million after the issuance of equity shares and a market cap-to-sales ratio of 2.3 times its FY24 earnings. Looking at these factors we recommend “Subscribe – Long Term” rating to the IPO.

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