Ceigall India listing price prediction: GMP signals muted gains; Details

Ceigall India IPO listing price prediction: Shares of Ceigall India, whose allotment for the initial public offering (IPO) was done on Tuesday, are scheduled to make their debut on the BSE and NSE on Thursday, August 8, 2024. The Ceigall India IPO received a decent response from investors, getting subscribed 14.01 times on the final day of subscription. The Qualified Institutional Buyers (QIB) category received the highest bid at 31.26 times, followed by 14.6 times in the Non-Institutional Investors (NII) category, and 3.82 times in the retail category.

Unlisted shares of Ceigall India continue to command a positive grey market premium (GMP) ahead of its listing. The company's shares are trading at a premium of nearly Rs 14.50 or 3.62 per cent on Wednesday, which is significantly lower than the GMP of Rs 70 or 17.64 per cent that the shares commanded on the IPO opening date of August 1, 2024. This indicates a lackluster listing for the Ceigall India shares on the bourses.

Prashanth Tapse, Senior VP (Research) at Mehta Equities, believes that considering the market mood and the subscription figures, Ceigall India would witness a decent listing gain in the range of 5-10 per cent on the issue price.

"We continue to believe and hold our long-term positive outlook on Ceigall India's business model, with a high focus on the infrastructure theme. The company could deliver impressive revenue growth, driven by a strategic focus on specialised structures and road projects, which underscores its technical expertise and market demand for its services. With a diverse order book spanning various regions and project types, Ceigall is well-positioned for sustained revenue visibility and profitability," said Tapse.

According to him, despite slightly higher valuations, the company's book-to-bill ratio offers healthy revenue visibility, standing at over 3 years, which is at the higher end compared to industry peers. Given its efficient business model, emphasising careful project selection and cost optimisation, Ceigall has consistently maximised profit margins and operational efficiency.

Considering this, Tapse recommended investors to 'HOLD' the Ceigall India Ltd IPO for a long-term perspective. "Post-listing, we believe the market can give Ceigall India a premium multiple due to its strong focus on project executions, which may result in delivering healthy post-listing gains on its issue price," he added.

About Ceigall India 

Founded in 2002, Ceigall India Limited is an infrastructure construction company with expertise in specialised structural projects, including elevated roads, flyovers, bridges, railway overpasses, tunnels, highways, expressways, and runways.

The company aims to raise Rs 1,252.66 crore from the IPO, which comprises a fresh issue of 17,063,640 shares worth Rs 684.25 crore and an offer for sale of 14,174,840 shares with a face value of Rs 5 each, aggregating up to Rs 568.41 crore. The proceeds will be used for the repayment/prepayment of all or part of the borrowings availed by the company, as well as for the purchase of equipment and for general corporate purposes.